TY  - SER
AU  -  Williams, Cole
AU  - Janssen, Maarten
TI  - Consumer Search and Product Returns in E-Commerce
SN  - 1945-7669
PB  - American Economic Journal: Microeconomics
KW  -  Communication
KW  -  Consumer Economics: Theory, Firm Behavior: Theory, Search
KW  -  Information and Knowledge
KW  -  Learning
KW  - Belief
KW  - Economics
N2  - E-commerce has led to a surge in products being returned after purchase. We analyze product returns as resulting from a trade-off between the social waste of returns and the search efficiency gains of being able to inspect a product's value after purchase. We find whenever returns are efficient, the market generates too few returns, as the parties involved in the transaction do not internalize the welfare benefit of consumers continuing their search, generating profits for other firms. We also show, despite their consumer-friendly appearance and the private cost of returns, firms may benefit and capture the gains from less costly search
UR  - https://www.aeaweb.org/articles?id=10.1257/mic.20230040
ER  -