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A paradox of little pre-purchase search for durables: the trade-off between prices, product lifecycle, and savings on purchases

Author

Listed:
  • Malakhov, Sergey

Abstract

The paper describes the microeconomic trade-off between prices, savings on purchases, and the time horizon of the consumption-leisure choice during the search for different products. When marginal costs of the search are equal to its marginal benefit, the time of search is proportional to products’ lifecycles and it is inversely proportional to starting prices.

Suggested Citation

  • Malakhov, Sergey, 2012. "A paradox of little pre-purchase search for durables: the trade-off between prices, product lifecycle, and savings on purchases," MPRA Paper 37376, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:37376
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    File URL: https://mpra.ub.uni-muenchen.de/37376/1/MPRA_paper_37376.pdf
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    File URL: https://mpra.ub.uni-muenchen.de/42359/1/MPRA_paper_42359.pdf
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    File URL: https://mpra.ub.uni-muenchen.de/57394/1/MPRA_paper_57394.pdf
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    References listed on IDEAS

    as
    1. Grewal, Dhruv & Marmorstein, Howard, 1994. " Market Price Variation, Perceived Price Variation, and Consumers' Price Search Decisions for Durable Goods," Journal of Consumer Research, Oxford University Press, vol. 21(3), pages 453-460, December.
    2. George J. Stigler, 1950. "The Development of Utility Theory. II," Journal of Political Economy, University of Chicago Press, vol. 58, pages 373-373.
    3. Marmorstein, Howard & Grewal, Dhruv & Fishe, Raymond P H, 1992. " The Value of Time Spent in Price-Comparison Shopping: Survey and Experimental Evidence," Journal of Consumer Research, Oxford University Press, vol. 19(1), pages 52-61, June.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Sergey Malakhov, 2014. "Satisficing Decision Procedure and Optimal Consumption-Leisure Choice," International Journal of Social Science Research, Macrothink Institute, vol. 2(2), pages 138-151, September.

    More about this item

    Keywords

    durables; time horizon; product lifecycle; saving on purchase; pre-purchase search;

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

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