Comments on "The Economics of Consumer Information Acquisition."

Unbeknown to either of us, Wilde (this issue) and I have been pursuing similar lines of inquiry. We are both investigating optimal consumer decision rules when the consumer is faced with some attributes of a good whose qualities he can determine prior to purchase (search attributes) and with some other attributes for the same good whose qualities he can determine only after purchase (experience attributes). It is not surprising, therefore, that I think this is a particularly fruitful line of inquiry. Since Wilde and I are in such general agreement, little purpose can be served by my detailing the little points of disagreement between us. Instead, I would like to focus on a question that Wilde neglects. Why should anybody be interested in the consumer searching, on one hand, or experiencing, on the other? This distinction between search attributes and experience attributes is the most decisive determinant of market behavior for a considerable number of characteristics important for both marketing and economics. Let me give you some feel for this proposition. To make the analysis tractable, I have assumed that goods differ by a single parameter, R = the ratio of the variance by brands in the utility of a representative consumer of all experience attributes to this variance for search attributes. The greater the value of R, the more a consumer will choose to get his information by way of experience and the less by way of search. Hence R measures the relative importance of experience and search. Clearly R is unobservable. However, one can get observable implications from the behavior of R. We can determine from theory whether some given observable market variable will be positively or negatively related to R. Those market variables which are both positively related to R or both negatively related to R will be positively related to each other. When one market variable is positively related to R and one is