PRICE SEARCH IN THE RETAIL GROCERY MARKET

The literature has produced an incomplete understanding of factors exp laining the variance in price search in markets in which search is a r egularly occurring activity. The authors develop a model of price sear ch in the retail grocery industry by expanding the classic cost-benefi t model and integrating psychosocial returns and concepts from human c apital theory. The results indicate that prior investment search and m arket mavenism explain significant amounts of variance in price- and s pecials-related search, respectively, beyond that accounted for by eco nomic costs and returns. The authors further explore the habitual natu re of price search in this industry, consider the implications of the social value of price-specials information, and discuss the indirect i mpact of demographic characteristics. They consider implications for p ricing strategy and competition, including reasons why previous resear ch has found that executives overestimate consumer price search.