But if one is sensitive about differences in price and quality, he wants to find the best possible place to buy the product, no matter how high the search costs may be.
The question is how much he can afford for search costs. If search costs are too high, he can’t buy a good product for a desirable price because he can’t spend time endlessly searching for a place that sells the product at a good price.
A consumer has to buy a product of reasonable quality for a reasonable price within the search cost limit that he has set. If search costs become extremely high, a consumer sometimes gives up a purchase. He gives up buying a product because he can’t find it. If so, this is bad both for the consumer and for a potential seller who could have sold the product. The development of the market economy in the modern age can be summed up as a process of reducing search costs.
Voters who need to select a candidate for an election also pay search costs. In Korea, voters have had to watch since early this year the competition among presidential hopefuls and chaotic party primaries to find out who would become the final contender for the presidential race. It was hard to tell what items would be presented, let alone examine their quality and price. A candidate left his own party and ran as an independent, political parties talked about merging and some candidates talked about unifying for a single candidate, only increasing search costs for voters.
Now, the presidential candidates have completed registrations for the election so the election market is open. In the market for the election, the period for searching has ended and the season for marketing has begun. The problem is that it is still hard to know the quality and price of products in the marketplace. The presidential candidates have not presented decent pledges; they are only working hard to reveal rivals’ flaws, just like a merchant who does not show his goods but just says others’ are bad. Thus, it is more difficult for voters to spot a good item.
If a product turns out to have a flaw, we can get a refund. But if we pick the wrong person for president, we can’t get a replacement. That would be very bad indeed.
The writer is an editorial writer of the JoongAng Ilbo.
By Kim Jong-soo [email@example.com]