Testing Models of Consumer Search Using Data on Web Browsing and Purchasing Behavior
American Economic Review
vol. 102,
no. 6, October 2012
(pp. 2955-80)
Abstract
Using a large dataset on web browsing and purchasing behavior we test to what extent consumers are searching in accordance to various search models. We find that the benchmark model of sequential search with a known price distribution can be rejected based on recall patterns found in the data as well as the absence of dependence of search decisions on prices. Our findings suggest fixed sample size search provides a more accurate description of search behavior. We then utilize the fixed sample size search model to estimate demand elasticities of online bookstores in an environment where store preferences are heterogeneous. (JEL D12, D83, L81)Citation
De Los Santos, Babur, Ali Hortaçsu, and Matthijs R. Wildenbeest. 2012. "Testing Models of Consumer Search Using Data on Web Browsing and Purchasing Behavior." American Economic Review, 102 (6): 2955-80. DOI: 10.1257/aer.102.6.2955Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- D83 Search; Learning; Information and Knowledge; Communication; Belief
- L81 Retail and Wholesale Trade; e-Commerce