Consumer Search: Not Enough Or Too Much?
We study search behavior in a generalized "secretary problem" environment in which consumers search sequentially for the best alternative from a known and finite set of multi-attribute alternatives. In contrast to most previous studies, we make no distributional assumptions about the quality of the alternatives. Rather, at each stage of the search the consumers are only assumed to be able to rank order the alternatives they have already inspected in terms of their overall quality. Our study departs from previous experimental investigations of the secretary problem by including search costs and allowing for recall (backward solicitation) of previously inspected alternatives. Both the number of alternatives and the cost of searching are manipulated experimentally in a factorial design. In the no-cost condition, we find that subjects do not search enough, whereas in the cost condition they search too much. We propose a simple behavioral decision model that incorporates both local and global patterns of the sequence--patterns that should have been ignored by a rational consumer--and then show that it can account for the major patterns of the observed results.
|Date of creation:||19 Oct 2001|
|Note:||Type of Document - Acrobat PDF; prepared on PC; pages: 41; figures: included|
|Contact details of provider:|| Web page: http://econwpa.repec.org|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sonnemans, Joep, 1998. "Strategies of search," Journal of Economic Behavior & Organization, Elsevier, vol. 35(3), pages 309-332, April.
- Saad, Gad & Russo, J. Edward, 1996. "Stopping Criteria in Sequential Choice," Organizational Behavior and Human Decision Processes, Elsevier, vol. 67(3), pages 258-270, September.
- Zwick, Rami & Rapoport, Amnon & Weg, Eythan, 2000.
"Invariance failure under subgame perfectness in sequential bargaining,"
Journal of Economic Psychology,
Elsevier, vol. 21(5), pages 517-544, October.
- Rami Zwick & Eythan Weg & Amnon Rapoport, 1999. "Invariance failure under subgame perfectness in sequential bargaining," Experimental 9903002, EconWPA.
- Hey, John D., 1987. "Still searching," Journal of Economic Behavior & Organization, Elsevier, vol. 8(1), pages 137-144, March.
- Seale, Darryl A. & Rapoport, Amnon, 1997. "Sequential Decision Making with Relative Ranks: An Experimental Investigation of the "Secretary Problem">," Organizational Behavior and Human Decision Processes, Elsevier, vol. 69(3), pages 221-236, March.
- Green, Paul E & Helsen, Kristiaan & Shandler, Bruce, 1988. " Conjoint Internal Validity under Alternative Profile Presentations," Journal of Consumer Research, Oxford University Press, vol. 15(3), pages 392-397, December.
- Furse, David H & Punj, Girish N & Stewart, David W, 1984. " A Typology of Individual Search Strategies among Purchasers of New Automobiles," Journal of Consumer Research, Oxford University Press, vol. 10(4), pages 417-431, March.
- Goldman, Arieh & Johansson, J K, 1978. " Determinants of Search for Lower Prices: An Empirical Assessment of the Economics of Information Theory," Journal of Consumer Research, Oxford University Press, vol. 5(3), pages 176-186, December.
- Braunstein, Yale M & Schotter, Andrew, 1982. "Labor Market Search: An Experimental Study," Economic Inquiry, Western Economic Association International, vol. 20(1), pages 133-144, January.
- Lippman, Steven A & McCall, John J, 1976. "The Economics of Job Search: A Survey," Economic Inquiry, Western Economic Association International, vol. 14(3), pages 347-368, September.
- Urbany, Joel E, 1986. " An Experimental Examination of the Economics of Information," Journal of Consumer Research, Oxford University Press, vol. 13(2), pages 257-271, September.
- Cox, James C & Oaxaca, Ronald L, 1989. "Laboratory Experiments with a Finite-Horizon Job-Search Model," Journal of Risk and Uncertainty, Springer, vol. 2(3), pages 301-329, September.
- Claxton, John D & Fry, Joseph N & Portis, Bernard, 1974. " A Taxonomy of Prepurchase Information Gathering Patterns," Journal of Consumer Research, Oxford University Press, vol. 1(3), pages 35-42, December.
- Dueker, Michael, 1999. "Conditional Heteroscedasticity in Qualitative Response Models of Time Series: A Gibbs-Sampling Approach to the Bank Prime Rate," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(4), pages 466-472, October.
- Michael J. Dueker, 1998. "Conditional heteroskedasticity in qualitative response models of time series: a Gibbs sampling approach to the bank prime rate," Working Papers 1998-011, Federal Reserve Bank of St. Louis.
- Schotter, Andrew & Braunstein, Yale M, 1981. "Economic Search: An Experimental Study," Economic Inquiry, Western Economic Association International, vol. 19(1), pages 1-25, January.
- repec:spr:grdene:v:8:y:1999:i:6:d:10.1023_a:1008616514620 is not listed on IDEAS
- Rami Zwick & Ching Chyi Lee, 1999. "Bargaining and Search: An Experimental Study," Experimental 9902003, EconWPA. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpex:0110002. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA)
If references are entirely missing, you can add them using this form.