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One of the major theories dealing with the determinants of consumer search was first proposed by economist George Stigler in 1961 and is called "the economics of information." This basic model of search, used extensively by economists, has proven to be fairly robust in the analysis of market structure and functioning (Linder 1970; Mincer 1963; Rothschild 1973; Telser 1973). Much of the empirical work using this theory has focused on its application to durable goods markets, usually involving large ticket items such as television sets (Duncan and Olshansky 1982) and automobiles (Bennett and Mandell 1969).
A few scholars outside of the discipline of economics have recognized the potential application of this theory to behavioral aspects of search (Goldman and Johansson 1978; Urbany 1986). However, one of the limitations of applying Stigler's theory in this area is that it does not explicitly incorporate many noneconomic factors identified in other disciplines as having a major impact on search, such as purchase involvement (Slama and Tashchian 1985) and social visibility of the purchase (Feick and Price 1987). Another reason for its lack of application in other disciplines is the ambiguity of its theoretical predictions in less structured purchase decisions. Examples of such situations would be those for frequently purchased, low ticket items and nondurable goods, for example, pencils, gasoline, and grocery purchases. In these markets the marginal benefits of search for each individual item are negligible, yet the accumulated benefits in the category of purchases may be substantial. In addition, empirical evidence indicates that in these markets other nonmonetary shopping goals, such as store image or shopping environment, may well be a more important determinant of search behavior (Claus and Hardwick 1972).
The focus of this research is an examination of the usefulness of the "economics of information" theory to the study of consumer search in a market for frequently purchased, nondurable grocery items. This market is of particular interest because of its intensely competitive nature, the fact that a large proportion of the average consumer's budget is spent on grocery items, and because of the well-documented low level of price awareness of consumers shopping in this market. The study examines both the antecedent (pre-store) and point of purchase (in-store) search. The model employed to study this phenomenon...