Search, Experience and Credence Goods

TL;DR

The concept of categorizing goods into search, experience, and creedence attributes helps understand consumer perception and how the law should respond.

Transcript

the tripartite distinction of search experience and Creedon goods originally made by Philip Nelson in 1970 helps categorize different features of products or services based on when consumers are able to assess their true qualities search Goods have the kind of attributes that you can fully perceive prior to purchase that is before you enter into a ... Read More

Key Insights

• 👋 The tripartite distinction of goods into search, experience, and creedence attributes helps categorize different features of products or services.
• 👋 Search goods can be fully perceived prior to purchase and don't require relying on the seller's reputation.
• 👋 Experience goods can only be ascertained after purchase, and their quality can vary from consumer to consumer.
• 😒 Creedence goods have attributes that are difficult to ascertain, even after use.
• 👋 The law can tailor legal rules based on the attributes of goods to protect consumer interests.
• 👋 Credible advertising is crucial for search goods, while robust trademark laws build seller reputation for experience goods.
• 👋 For credence goods, the law should monitor aggregate quality to ensure safety and effectiveness.

Questions & Answers

Q: How can you differentiate between search, experience, and creedence goods?

Search goods can be fully evaluated before purchase, experience goods can only be assessed after purchase, and creedence goods are difficult to judge even after use.

Q: Why is the reputation of the seller less important for search goods?

In search goods, consumers can judge the quality by inspecting the product themselves, so the reputation of the seller becomes less important.

Q: What role does the law play in categorizing goods?

The law should foster credible advertising for search goods, establish robust trademark laws for experience goods, and monitor aggregate quality for credence goods.

Q: Can you provide examples of legislation or regulations for each type of attribute?

For search goods, legislation can focus on credible advertising, for experience goods, robust trademark laws can build seller reputation, and for credence goods, laws like FDA monitoring ensure safety and effectiveness.

Summary & Key Takeaways

• Search goods are products with attributes that can be fully perceived before purchase, such as a map or a photocopy.

• Experience goods can only be assessed after purchase, like a razor blade or laundry bleach.

• Creedence goods have attributes that are difficult to judge even after use, such as the expected life of a light bulb or the benefits of vitamins.