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Media type:
E-Article
Title:
Consumer Search with Uncertain Product Quality
Contributor:
Hey, John D.;
McKenna, Chris J.
imprint:
The University of Chicago Press, 1981
Published in:Journal of Political Economy
Language:
English
ISSN:
0022-3808;
1537-534X
Origination:
Footnote:
Description:
<p>This paper presents a unified model of consumer search when both prices and qualities are uncertain. It is assumed that price can be observed prior to purchase but that quality can be observed only after purchase and experience. This two-stage decision problem is of particular interest since, in practice, there is usually some connection between quality and price. Of the many interesting implications of this dependence explored in this paper is the result that the usual "reservation-price rule" may no longer be optimal; indeed, the optimal stopping set may take one of several alternative (and more realistic) forms.</p>