Selective Bargain Hunting. A Concise Test of Rational Consumer Search
50 Pages Posted: 7 Mar 2019
Date Written: January 27, 2019
A model of the allocation of time between work, leisure, and price-search for different goods predicts that consumers spend relatively more time searching for better prices of goods of which they consume relatively more. Using scanner data, we confirm empirically that consumers pay lower (higher) prices for goods that they buy more (less) of than other consumers.
Keywords: Consumption; Consumer Search; Time Use
JEL Classification: E21, D12
Suggested Citation: Suggested Citation