Abstract
AbstractA model of timeâallocation among work, leisure, and priceâsearch predicts that rational consumers pay relatively low prices for their preferred goods. Using scanner data, we confirm empirically the implication that consumers find better prices for items (defined by scanner codes, such as a 12âpack of Pepsi) within categories (such as carbonated drinks) of which they consume relatively more. This provides direct evidence that consumers face constraints on time and/or attention, and that they rationally allocate these scarce resources to optimize welfare.
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