Market, The Economic Theory of Markets, Choices and Prices Wiki (barely begun)

From Market

This article defines a property of goods: a property that makes sense in the context of a good being bought and sold, and evaluated from the perspective of the buyer, seller, or others affected by it.
View other properties of goods

Contents 1 History 2 Definition 3 Relation with other properties 3.1 Similar properties 3.2 Opposite properties 4 References 4.1 Journal references

History

The concept of experience good, in contrast with search good, was first discussed in a paper by Phillip Nelson titled Information and consumer behavior.

Definition

An experience good is a good for which a buyer cannot determine the total value and total cost (including hidden costs such as maintenance) without actually purchasing the good.

Experience goods are subject to problems such as adverse selection.

Relation with other properties

Similar properties

• Credence good: A good for which a buyer cannot ascertain the total value and total cost even after purchasing and using the good.

Opposite properties

• Search good: A good for which a buyer can try out a small sample to get a fair measure of the value of the good.

References

Journal references

• Information and consumer behavior by Phillip Nelson, The Journal of Political Economy, Volume 78,Number 2, Page 311 - 329(Year 1970): ^{JSTOR linkMore info}