CONSUMER SEARCH WITH UNCERTAIN PRODUCT QUALITY

In: Journal of political economy, Band 89, Heft 1, S. 54-66

Abstract

THIS PAPER PRESENTS A UNIFIED MODEL OF CONSUMER SEARCH WHEN BOTH PRICE AND QUALITY ARE UNCERTAIN. IT IS ASSUMED THAT PRICE CAN BE OBSERVED BEFORE PURCHASE, BUT QUALITY ONLY AFTER PURCHASE AND EXPERIENCE. THIS TWO-STAGE DECISION IS OF INTEREST SINCE THERE IS USUALLY A CONNECTION BETWEEN QUALITY AND PRICE. ONE IMPLICATE EXPLORED IS THAT THE "RESERVATION-PRICE" RULE MAY NO LONGER BE OPTIMAL.