| Abstract: | In most models of consumer behavior, the effects of search for lower prices is ignored. Typically consumers are assumed to face parametrically determined prices, the knowledge of which is freely available to the consumer. These basic assumptions are useful because some meaningful predictions may be made from the systematic application of economic analysis. But since in general consumers do not actually face aset of fixed prices for all goods, it is well to recognize that consumers can search rewardingly for more price in formation. By gaining more knowledge of commodity prices, consumers may be able to increase the amount of goods consumed by paying lower prices per good. In this dissertation, a model is developed in which consumers can find lower commodity prices by investing time in search. This model includes the contributions in price search theory in to a formal demand -for-leisure model consistent with conventional theory in order to place the consumer's price search alternative in perspective with the consumer's work and leisure alternatives and to derive explicitlysome results from it. Specifically determined a reeffects on consumer behavior (leisure, work and search) of changes in commodity prices, consumer wage rate, search efficiency and income. |
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