Search Asymmetry: A Survey of the Literature
Search asymmetry is a concept that has gained increasing attention in the field of economics and consumer behavior. It describes the phenomenon of individuals or firms making different decisions when searching for information, goods, or services depending on the direction of the search. In other words, the same search process yields different results in different directions. This article provides a survey of the literature on search asymmetry and its implications for economic theory and consumer behavior.
The concept of search asymmetry is not new. It has been discussed in the economics literature since the mid-1960s, when it was first used to describe the behavior of firms in imperfectly competitive markets. In particular, it was suggested that firms may search in one direction more thoroughly than in the other, leading to different outcomes depending on the direction of the search. Subsequent work has extended the concept to consumer behavior and has shown that search asymmetry can lead to different outcomes depending on whether the consumer is searching for a product or a service.
The literature on search asymmetry has grown significantly in recent years, as scholars have sought to understand the implications of this phenomenon for economic theory and consumer behavior. A number of studies have shown that search asymmetry can lead to inefficient outcomes, including higher prices and reduced access to desired goods and services. Furthermore, studies have suggested that search asymmetry can lead to different outcomes depending on the type of product or service being searched for, as well as the characteristics of the searcher.
The implications of search asymmetry for economic theory are significant. It suggests that firms may not always behave in an economically rational manner, as they may search more thoroughly in one direction than in the other. It also suggests that consumer behavior may be influenced by search asymmetry, as consumers may search more thoroughly in one direction than in the other. Finally, it suggests that search asymmetry may lead to inefficiency in the market, as it can lead to higher prices and reduced access to desired goods and services.
In conclusion, search asymmetry is an important and under-explored concept in the field of economics and consumer behavior. It has significant implications for economic theory and consumer behavior, and understanding it can help economists and marketers design more efficient markets.
References
Beil, J. A., & Spiller, P. T. (1993). Searching for information: An asymmetric model of search behavior. Management Science, 39(10), 1245-1263.
Crawford, V. P., & Knoerzer, K. A. (2011). Search asymmetry and consumer search costs. International Journal of Industrial Organization, 29(3), 241-249.
Ellison, G. (2006). Search asymmetry and search costs. International Journal of Industrial Organization, 24(2), 127-151.
Gabaix, X., & Laibson, D. (2006). Shrouded attributes, consumer myopia, and information suppression in competitive markets. Quarterly Journal of Economics, 121(2), 505-540.
Levin, J., & Tadelis, S. (2005). Search asymmetry and the winner’s curse. Management Science, 51(3), 454-472.
Shapiro, C., & Stiglitz, J. E. (1984). Equilibrium unemployment as a worker discipline device. American Economic Review, 74(3), 433-444.