The Economics of Consumer Information Acquisition.

The article focuses on surveys of theoretical work by economists on consumer information acquisition. Traditionally economists and consumer researchers have studied consumer behavior, under imperfect information, without paying a great deal of attention to one another. Recent work by economists has shown that market outcomes are very sensitive to consumer information acquisition strategies. Yet the economics literature has little to say about actual consumer behavior. Applying the concepts of search and experience to attributes instead of goods eliminates the difficulty altogether and permits a unified treatment of consumer behavior. The consumer uses a rule of thumb because inspection costs make instantaneous and perfect evaluation impossible. While economists have recently paid some attention to individual consumer behavior under imperfect information, a substantial effort has also been devoted to characterizing market organization when agents are imperfectly informed. The observation that price is fixed is, in a sense, a technical weakness. Other weaknesses, perhaps less obvious to economists, are associated with assumptions governing consumer behavior.