The Economics of Information: An Empirical Approach to Nelson's Search-Experience Framework

The economics of information offers a framework within which consumer responses to advertising may be examined. This research tests the propositions espoused by Nelson regarding differential skepticism for search and experience attribute claims. A 2 (search, experience claims) by 2 (objective, subjective) by 2 (low risk, high risk) between subjects analysis of covariance was performed. Results support Nelson's hypotheses. Consumers’ use of information is influenced by the nature of the advertised attribute, the semantic content of the claim, and the perception of risk associated with the product.