SUNK COSTS OF CONSUMER SEARCH: ECONOMIC RATIONALITY OF SATISFICING DECISION
SUNK COSTS OF CONSUMER SEARCH: ECONOMIC RATIONALITY OF SATISFICING DECISION

Summary/Abstract: The paper argues that sunk costs’ sensitivity can lead to the optimal consumption-leisure choiceunderprice dispersion. The increase in quantity to be purchased with the extension of the time horizon of theconsumption-leisure choice equalizes marginal costs of search with its marginal benefits. The implicit optimalchoice results in the explicit satisficing decision. The transformation of cognitive mechanism of discouragementinto satisficing happens only in the “common model” of consumer behavior. The paper argues that the cognitivemechanism of aspiration takes place when consumers try to get marginal savings on purchase greater than thewage rate and, therefore, they follow the “leisure model” of behavior where both the marginal utility of laborincome and the marginal utility of consumption become negative

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