This paper builds a formal theory of consumer behavior under imperfect information when goods are described by multiple characteristics which vary in their degree of "observability." An optimal strategy for the consumer is shown to exist. In general, this strategy is shown to involve both inspection (sampling to observe general characteristics of goods) and evaluation (consumption of goods to observe specific characteristics). Comparative statics of the optimal strategy are also analyzed.

This paper uses a formal model of search over multiattribute alternatives, analyzed in a product market setting, to investigate the theoretical foundations of the empirical literature on duration of search and turnover in product markets, labor markets, and marriage markets. A number of specific emirical predictions are also derived. In particular, whether "quality" is a "search" attribute or an "experience" attribute is related to the cost of search, the cost of inspection, the price of the good, and certain properties of the market distribution of price and quality.

This paper uses a formal model of search over multiattribute alternatives, analyzed in a product market setting, to investigate the theoretical foundations of the empirical literature on duration of search and turnover in product markets, labor markets, and marriage markets. A number of specific emirical predictions are also derived. In particular, whether "quality" is a "search" attribute or an "experience" attribute is related to the cost of search, the cost of inspection, the price of the good, and certain properties of the market distribution of price and quality.

This paper develops a general approach to characterizing optimal income tax and enforcement schemes. Our analysis clarifies the nature of the interplay between tax rates, audit probabilities and penalties for misreporting. In particular, it is shown that for a variety of objective functions for the principal the optimal tax schedule is in general concave (at least weakly) and monotonic; the marginal tax rates determine the audit probabilities; and less harsh penalties lead to higher enforcement costs. Our results imply that there exists a tradeoff between equity and efficiency considerations in the enforcement context which is similar to that in the moral hazard context for tax policy.

Jennifer F. Reinganum, Louis L. Wilde; A Note on Enforcement Uncertainty and Taxpayer Compliance*, The Quarterly Journal of Economics, Volume 103, Issue 4,

This paper considers markets in which consumers are imperfectly informed about both product prices and quality levels offered by firms. We characterize necessary and sufficient conditions for existence of the various equilibrium configurations of price and quality that can arise in two paradigm cases; when all consumers prefer higher quality and when all consumers prefer lower quality. Our results suggest that firms will exploit imperfect information by charging noncompetitive prices as well as by offering other than ideal quality in the former case, but only by changing noncompetitive prices in the latter case.

Louis L. Wilde, Alan Schwartz; Equilibrium Comparison Shopping, The Review of Economic Studies, Volume 46, Issue 3, 1 July 1979, Pages 543–553, https://doi

This paper analyzes empirically for the years 1980-1988 the factors that led states with state income taxes to run tax amnesty programs. We find that the potential yield from an amnesty is more important than the fiscal status of a state. Furthermore, we estimate that if the 1RS audit rate had remained constant during the 1980–1988 period (instead of falling by almost one half), then the cumulative probability that an average state would have had a tax amnesty by 1988 would have fallen by just over 25 percent.