Currency of Search: How Spending Time on Search is not the Same as Spending Money

Abstract

Search theories suggest that a decline in search costs increases search behavior. This relationship has been well supported by prior experimental research but not by studies conducted in retail settings. Our review of the literature suggests that this discrepancy might be driven by the fact that prior experiments typically involve money-based search whereas actual search in retail settings is usually time-based. We argue that the currency of search plays a moderating role. We find that when participants spend money on search, a decrease in search costs has a significant effect on search decisions but, when they spend time on search, a decrease in search costs either has a relatively weak effect (experiment 1) or no effect at all (experiment 2). Furthermore, this insensitivity in time also emerges for search payoffs (experiment 3). We also offer evidence for the processes underlying these effects. Our results provide a new lens to examine inconsistencies in the search literature, and present a view of search that is more applicable to the retail context.

Keywords: information search, time, money, consumer psychology, judgment and decision making, retailing

JEL Classification: A1, C91, D8, D83, M3