Skip navigation

Testing Models of Consumer Search using Data on Web Browsing andPurchasing Behavior

Authors: De los Santos, Babur - Indiana University
Hortacsu, Ali- University of Chicago and NBER
Wildenbeest, Matthijs R. - Indiana University
Keywords: consumer search, electronic commerce, consumer behavior
Issue Date: 2009
Series/Report no.: Net Institute Working Paper;09-23
Abstract: Using a large data set on web browsing and purchasing behavior we test to what extent consumers are searching in accordance to various classical search models. We find that the benchmark model of sequential search with a known distributions of prices can be rejected based on the recall patterns we observe in the data. Moreover, we show that even if consumers are initially unaware of the price distribution and have to learn the price distribution, observed search behavior for given consumers over time is more consistent with non-sequential search than sequential search with learning. Our findings suggest non-sequential search provides a more accurate description of observed consumer search behavior. We then utilize the nonsequential search model to estimate the price elasticities and markups of online book retailers.
Appears in Collections:NET Institute Working Papers Series

Files in This Item:
File Description SizeFormat 
DelosSantos_Hortacsu_Wildenbeest_09-23.pdf345.06 kBAdobe PDFView/Open

Items in FDA are protected by copyright, with all rights reserved, unless otherwise indicated.