Asymmetric Search and Loss Aversion: Choice Experiment on Consumer Willingness to Search in the Gasoline Retail Market

Document Type

Working Paper

Publication Date


JEL Codes

D83, D03


We conduct an internet survey among a representative sample of 490 drivers in the State of Ohio to examine the decision-making process behind intended search decisions. The internet survey affords us the opportunity to overcome endogeneity difficulties by imposing exogenous price changes in a random sample of gasoline consumers. We find evidence of asymmetric search: 45% of consumers search when prices increase, while 12% search when prices decrease. Results further suggest that asymmetric search can be explained by loss aversion: consumers evaluate current prices compared to a reference price, and as a consequence value price increases differently from price decreases.