Search Costs and Context Effects

B-Tier
Journal: American Economic Journal: Microeconomics
Year: 2025
Volume: 17
Issue: 2
Pages: 127-61

Authors (4)

Heiko Karle (Frankfurt School of Finance) Florian Kerzenmacher (not in RePEc) Heiner Schumacher (not in RePEc) Frank Verboven (KU Leuven)

Score contribution per author:

0.503 = (α=2.01 / 4 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Empirical search cost estimates are often large and increasing in the size of the transaction. We conduct an online search experiment in which we manipulate the price scale while keeping the physical search effort per price quote constant. Additionally, we obtain a direct measure of subjects' opportunity costs of time. Using a standard search model, we confirm that search cost estimates are large and increasing in the price scale. We then modify the model to incorporate context effects with respect to prices. This results in search cost estimates that are scale independent and correspond well to subjects' opportunity costs of time.

Technical Details

RePEc Handle
repec:aea:aejmic:v:17:y:2025:i:2:p:127-61
Journal Field
General
Author Count
4
Added to Database
2026-01-25