DP6939 Buying Online: Sequential Decision Making by Shopbot Visitors
|Author(s):||Uwe Dulleck, Franz Hackl, Bernhard Weiss, Rudolf Winter-Ebmer|
|Publication Date:||August 2008|
|Keyword(s):||decision theory, e-commerce, heuristics, price comparison, seller reputation|
|Programme Areas:||Industrial Organization|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=6939|
In this article we propose a two stage procedure to model demand decisions by customers who are balancing several dimensions of a product. We then test our procedure by analyzing the behavior of buyers from an Austrian price comparison site. Although in such a market a consumer will typically search for the cheapest price for a given product, reliability and service of the supplier are other important characteristics of a retailer. In our data, consumers follow such a two stage procedure: they select a shortlist of suppliers by using the price variable only; finally, they trade off reliability and price among these shortlisted suppliers.