December 15, 2005
Shopping: Negotiation or Search Cost?
Posted by Christine Hurt

'Tis the season for shopping, I guess.  Nate Oman posted recently about consumer shopping as contract negotiation, and Eric Goldman rightly commented about the high transaction costs of shopping.  Today, Tyler Cowen blogs about how not shopping around is merely swapping money for time and that those of us who are busiest pay more on goods as a cost of not shopping around.

I have to confess to being in the Cowen camp of people who do not spend the time necessary to shop for bargains.  I never am able to brag about the $5 party dress I bought at TJ Maxx or the software that was free after rebate at Costco.  Someone once told me that the secret to finding bargains at TJ Maxx, Marshall's or Loehmann's was to go there often so you get there when the good shipments come in.  Yuck.  I shop online.  That may seem like bargain shopping because I can compare prices fairly easily, but amazingly most things seem to be the same price on the Internet when you start looking around.  I also pay for the convenience by paying for shipping, which is sort of unnecessary.  However, most of my gift recipients live elsewhere, so I would have to ship things myself anyway.  Shipping to myself I rationalize as a delivery cost that, as noted before, buys me time saved schlepping all over town.

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