Published October 27, 2017
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On the Formal Theory of Inspection and Evaluation in Product Markets
- Creators
- Wilde, Louis L.
Abstract
This paper builds a formal theory of consumer behavior under imperfect information when goods are described by multiple characteristics which vary in their degree of "observability." An optimal strategy for the consumer is shown to exist. In general, this strategy is shown to involve both inspection (sampling to observe general characteristics of goods) and evaluation (consumption of goods to observe specific characteristics). Comparative statics of the optimal strategy are also analyzed.
Additional Information
Published as Wilde, Louis L. "On the formal theory of inspection and evaluation in product markets." Econometrica: Journal of the Econometric Society (1980): 1265-1279.Attached Files
Submitted - sswp146.pdf
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Additional details
- Eprint ID
- 82701
- Resolver ID
- CaltechAUTHORS:20171026-133232604
- Created
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2017-10-27Created from EPrint's datestamp field
- Updated
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2019-10-03Created from EPrint's last_modified field
- Caltech groups
- Social Science Working Papers
- Series Name
- Social Science Working Paper
- Series Volume or Issue Number
- 146