- Elgar original reference
Edited by Ruth Towse
Chapter 29: Experience Goods
Michael Hutter The notion of ‘experience goods’ appears in two strands of literature. The first one originates with Nelson (1970) and links consumer behaviour to information: in order to estimate the utility of an unknown good, the consumer has a choice of searching for information about the good or experiencing the good. Experience goods, in this theoretical tradition, are goods with high search costs. The second strand of literature was triggered by attempts to redefine the set of sectors that make up the economy by introducing a ‘creative sector’ whose branches or industries are characterized by unusually high rates of product change, by high growth rates and by contributions to productivity in the rest of the economy (DCMS, 1998; UNCTAD, 2008). The common feature of these branches is seen in individual ‘creative acts’, but it has also been argued that the consumer’s experience (Bille and Lorenzen, 2008; Bille, 2009) is the decisive feature. The notion of ‘experience goods’ appears to be of increasing theoretical and practical relevance. Experience as a means to an end According to Nelson (1970), consumers who are in the market for goods, but have incomplete information about the benefits obtained from consuming them, have two alternatives to find such information: they can search for available external signals regarding the expected benefits, or they can experience the good and thus generate their own internal information. Experiences in this model are experiments to discover something about the true state of the world that, once attained, will lead to...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.