Bruce I. Carlin
University of California, Los Angeles (UCLA) - Anderson School of Management
Florian P. Ederer
Yale School of Management
March 28, 2013
Consumer search is not only costly but also tiring. We characterize the intertemporal effects that search fatigue has on monopoly and oligopoly prices, the product lines offered by firms, and the provision of consumer assistance (i.e., advice). These effects vary based on whether search is all-or-nothing or sequential in nature, whether learning takes place, and whether consumers exhibit brand loyalty. In contrast to standard search models, accounting for fatigue leads to loss leadership strategies, product proliferation, time-varying prices and consumer assistance. We analyze the welfare implications of search fatigue and highlight the novel empirical implications that our analysis generates.
Number of Pages in PDF File: 27
Keywords: consumer search, fatigue, product proliferation, time-varying prices, loss leadership
JEL Classification: D83, L13, D03, G02working papers series
Date posted: August 29, 2012 ; Last revised: March 28, 2013
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