Experience good
Encyclopedia
In economics
, an experience good is a product or service where product characteristics such as quality or price are difficult to observe in advance, but these characteristics can be ascertained upon consumption. The concept is originally due to Philip Nelson, who contrasted an experience good with a search good
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Experience goods pose difficulties for consumers in accurately making consumption choices. In service areas, such as healthcare, they reward reputation and create inertia. Experience goods typically have lower price elasticity than search goods, as consumers fear that lower prices may be due to unobservable problems or quality issues.
Post-experience goods, also called credence good
s, are goods for which it is difficult for consumers to ascertain the quality even after they have consumed them, such as vitamin supplements. Potential consumers of these goods may require third-party information, provided by private rating agencies or government bodies.
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
, an experience good is a product or service where product characteristics such as quality or price are difficult to observe in advance, but these characteristics can be ascertained upon consumption. The concept is originally due to Philip Nelson, who contrasted an experience good with a search good
Search good
In economics, a search good is a product or service with features and characteristics easily evaluated before purchase. In a distinction originally due to Philip Nelson, a search good is contrasted with an experience good....
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Experience goods pose difficulties for consumers in accurately making consumption choices. In service areas, such as healthcare, they reward reputation and create inertia. Experience goods typically have lower price elasticity than search goods, as consumers fear that lower prices may be due to unobservable problems or quality issues.
Post-experience goods, also called credence good
Credence good
A credence good is a term used in economics for a good whose utility impact is difficult or impossible for the consumer to ascertain. In contrast to experience goods, the utility gain or loss of credence goods is difficult to measure after consumption as well. The seller of the good knows the...
s, are goods for which it is difficult for consumers to ascertain the quality even after they have consumed them, such as vitamin supplements. Potential consumers of these goods may require third-party information, provided by private rating agencies or government bodies.