33 Pages Posted: 29 Aug 2012 Last revised: 12 Jun 2014
Date Written: June 9, 2014
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 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.
Keywords: consumer search, fatigue, product proliferation, time-varying prices, loss leadership
JEL Classification: D83, L13, D03, G02
Suggested Citation: Suggested Citation