Consumer Information Search Revisited: Theory and Empirical Analysis

Abstract

A comprehensive theoretical framework for understanding consumers' information search behavior is presented. Unlike previous research, our model identifies not only what factors affect consumers' search behavior but also how these factors interact with each other. In particular, the model emphasizes the effect of prior brand perceptions on the search process. We argue that when consumers have brand-specific prior distributions of utility, the existence of relative uncertainty among brands is necessary for 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 inverted-U-shaped relationship between search activity and experience. We test our theory on consumers' search behavior for new automobiles, using data collected contemporaneously with consumers' actual decision process. Our data support our theory.