Search Cost

DEFINITION of 'Search Cost'

The time, energy and money expended by a consumer who is researching a product or service for purchase. Search costs include the opportunity cost of the time and energy spent on searching - time and energy that could have been devoted to other activities - and perhaps the money spent to travel between stores examining different options, purchase research data or consult an expert for purchasing advice.

BREAKING DOWN 'Search Cost'

Search costs tend to be higher on big-ticket items because it makes more sense to spend time, energy and possibly money researching how to get the most reliable and affordable car than it does researching how to get the tastiest and most affordable sandwich. The consequences of making a bad purchase decision on an expensive item are much greater than those for an inexpensive item.





Thanks to the internet, buyers face lower search costs for almost anything they want to buy today than they did two decades ago, because users can now get fast, accurate information on products and services without even having to leave home.

RELATED TERMS
  1. Alternative Energy ETF

    An exchange-traded fund that invests in companies engaged in ...
  2. Search Theory

    A study of buyers and sellers who cannot instantly find a commerce ...
  3. Wholesale Energy

    A term referring to the purchase and sale of energy products ...
  4. Production Cost

    A cost incurred by a business when manufacturing a good or producing ...
  5. Swing Option

    A type of contract used by investors in energy markets that lets ...
  6. Energy Return On Investment - EROI

    The amount of energy that has to be expended in order to produce ...
Related Articles
  1. Investing

    Is Google Beginning to Lose Its Dominance in Search?

    While Google remains king on the desktop, the migration to mobile threatens its leadership in search.
  2. Personal Wealth & Private Banking

    Using a Search Fund to Buy a Small Business

    Working through a search fund when you want to acquire a small business is a growing trend. Here's how this investment vehicle works.
  3. Fundamental Analysis

    Search Engines That Compete With Google

    While Bing now controls a substantial part of the online search market, the real threat to Google's dominance may come from unexpected places.
  4. Entrepreneurship

    How To Become A Renewable Energy Entrepreneur

    The recent trend towards greener, more sustainable technology is creating many opportunities for entrepreneurial-minded individuals.
  5. Investing

    The US Is Becoming More Energy Independent

    Rising production and abundant shale oil and gas reserves are moving the US towards energy independence, which could happen by 2020
  6. Financial Advisors

    SEO Tips for Financial Advisors

    Search engine optimization is just one piece of the puzzle when it comes to creating an effective online presence.
  7. Fundamental Analysis

    Yahoo To Use Google Search Results. Yes, Again.

    Can Google remain the world's top search engine forever? Yahoo's on-again, off-again agreement to offer Google search results in Yahoo seems to suggest that Google will not be dethroned any time ...
  8. Economics

    4 Things to Know About the Future of US Energy

    The fracking revolution has underpinned the U.S. energy industry in recent years, with positive trends likely to continue into the next decade.
  9. Taxes

    3. Home Energy Efficiency Improvements

    Tax deductions and credits aren't just for big companies. You might be surprised how many tax breaks apply to your return.
  10. Personal Finance

    The Best Online Job Search Techniques

    Looking for a job? Today the best online job search techniques involve social media, automated searches, and well-crafted online resumes.
RELATED FAQS
  1. If my home runs power off the grid, what is the specific environmental impact?

    Going off the grid, or using solar energy, can result in much more than saving the homeowner money. It can help the planet ... Read Answer >>
  2. What factors are the primary drivers of share prices in the oil and gas sector?

    Learn the primary drivers behind changes in the share prices of the oil and gas sector. The oil and gas sector is a cyclical ... Read Answer >>
  3. What is the difference between cost and price?

    Consider how cost affects a product's price. Corporate expenses and the current cost of living both impact the final sticker ... Read Answer >>
  4. How do Internet companies profit if they give away their services for free?

    Learn how companies in the Internet sector make a profit when service, content and user applications are offered at no cost ... Read Answer >>
  5. How much of the United States' energy comes from oil and gas?

    Examine the energy sources for the United States, and learn how much of the total U.S. energy supply comes from the oil and ... Read Answer >>
  6. How can I make my home run on energy that is 100% off the grid?

    Taking a home 100% off the grid requires paying attention to all sources of energy in the home. These sources include more ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center