SALUTE AND CRITIQUE - REMARKS ON RATCHFORD AND GUPTA ANALYSIS OF PRICE-QUALITY RELATIONS

The author argues that the assumptions contained in the model constructed by Ratchford and Gupta in an earlier issue of this journal are highly unrealistic. These assumptions concern the nature, extent, and outcome of consumer search. In the opinion of the author, Ratchford and Gupta's conclusion that the lack of a price-quality correlation is most likely not the most important determinant of consumer losses, is a child of the assumptions of the model. Had Ratchford and Gupta made the more realistic assumption that consumers search little, thc typical near-zero correlation between price and quality would probably have been a very important determinant of losses.