Consumer Information Search Revisited: Theory and Empirical Analysis
Posted: 29 Apr 1998 Last revised: 9 Mar 2011
Date Written: 1995
A comprehensive theoretical framework for understanding consumers information search behavior is presented. Unlike previous research, our model not only identifies what factors affect consumers search behavior, but also how they interact with each other. In particular, it emphasizes the interactive effect of prior market perceptions on the search process. We argue that when consumers have brand-specific prior distributions, then the existence of relative uncertainty among brands is necessary for a search to be useful. Thus we explain why product class involvement or low search costs may not be sufficient to induce large amounts of search activity, and why there may be an inverse-U shaped relationship between search activity and experience. We test our theory on consumers search behavior for new automobiles, using data collected contemporaneously with the consumers actual decision process. Our data support our theory.
Keywords: Information search, price search
JEL Classification: D11, D12
Suggested Citation: Suggested Citation