Discussion paper

DP6939 Buying Online: Sequential Decision Making by Shopbot Visitors

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.


Winter-Ebmer, R, U Dulleck, F Hackl and B Weiss (2008), ‘DP6939 Buying Online: Sequential Decision Making by Shopbot Visitors‘, CEPR Discussion Paper No. 6939. CEPR Press, Paris & London. https://cepr.org/publications/dp6939