How Consumers Allocate Their Time When Searching for Information

Abstract

The authors assume consumers maximize value subject to a constraint on their time. The value of positive information is the increase in the expected utility of the consideration set; the value of negative information is the utility of choosing on the basis of the information versus the utility of a potentially erroneous decision without information. They examine four rules consumers use to select the order in which to visit sources. They use a multimedia computer laboratory, which allows consumers free choice among showroom visits, word-of-mouth interviews, magazine articles, and advertising for a new automobile. They estimate source value, compare predictions of time allocations to actual allocations, examine the impact of time constraints on the use of negative information, and calculate the relative performance of the source-order decision rules. They close with suggestions for experiments.