摘要 :
We present a framework to study directed consumer search. Firms sell products with two attributes. One is readily observable, the other is observed only after visiting a firm. Search is directed as the order of search is influence...
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We present a framework to study directed consumer search. Firms sell products with two attributes. One is readily observable, the other is observed only after visiting a firm. Search is directed as the order of search is influenced by the observable characteristics. Moreover, if prices are readily observable, firms also influence search direction by their choice of price. We show that when consumers observe prices before search, prices and profits are lower than when they do not. A lower price then not only retains more consumers, but is also more likely to attract them; the latter effect makes demand more elastic. When consumers observe prices before searching, prices decrease in search costs. Consumer surplus initially increases in search costs, but may ultimately decrease. (c) 2018 Elsevier B.V. All rights reserved.
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This paper uses a search model to study the competition between a store brand and a third-party brand in a platform. Consumers sample products in a sequential ordering. Sampling cost is crucial for determining product orderings. W...
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This paper uses a search model to study the competition between a store brand and a third-party brand in a platform. Consumers sample products in a sequential ordering. Sampling cost is crucial for determining product orderings. We find that, the platform prefers making the third-party brand prominent when the outside market is closed, and generally prefers making the store brand prominent when there are infinitely many firms in the outside market. The difference in product ordering can be attributed to the strength of competition-intensifying effect and market-expansion effect. Generally speaking, the platform's choice lowers down consumer surplus and social welfare.
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We extend Stahl's (1989) model to a setting with differentiated products to study the effects of price-directed consumer search. Consumers engage in costly search to find out whether products meet their needs. Consumer search is d...
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We extend Stahl's (1989) model to a setting with differentiated products to study the effects of price-directed consumer search. Consumers engage in costly search to find out whether products meet their needs. Consumer search is directed by prices when they are observable before search, in contrast to the case in which prices are discovered only after search, where search is naturally random. The equilibrium under price-directed search differs substantially from that under random search, despite certain similarities. We show that as search costs decrease, sales become more likely and firms earn higher expected profits under price-directed search, whereas the opposite holds under random search. Moreover, compared with random search, under price-directed search firms, expected profits are always lower, but consumer surplus and total welfare are higher provided that the search cost is sufficiently small. (C) 2018 Elsevier B.V. All rights reserved.
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We demonstrate that regulations that lower consumer search costs and make them less heterogeneous across consumers can lead to higher prices charged by firms. We estimate the distribution of consumer search costs for 366 isolated ...
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We demonstrate that regulations that lower consumer search costs and make them less heterogeneous across consumers can lead to higher prices charged by firms. We estimate the distribution of consumer search costs for 366 isolated retail gasoline markets, and find that reducing the mean and standard deviation by 20% and 48%, respectively, leads to price increases in 32% of markets and an average price increase of 5.2 cents per gallon across all markets. Thus, price transparency regulation that results in higher prices may not stem from collusion, but from an equilibrium with less consumer search. (C) 2017 Elsevier B.V. All rights reserved.
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It is widely held that sellers prefer to appear early in a consumer,s search, but evidence suggests this need not be the case. We develop a model which incorporates costly search and costly return and demonstrate that appearing la...
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It is widely held that sellers prefer to appear early in a consumer,s search, but evidence suggests this need not be the case. We develop a model which incorporates costly search and costly return and demonstrate that appearing later may be better. When return is free, prominence is desirable by standard logic, however costly return induces a tradeoff - it benefits an earlier seller by reducing the initial search but also benefits a later seller by preventing return conditional on search. We show that for small search costs later is better whenever high outcomes have a low likelihood, or whenever two independent match value draws are likely to be near one another. Later can still be better if sellers compete in prices prior to search. Finally, with many sellers the optimal position may be first, last, or in between but earlier positions are favored as the number of sellers grows. (C) 2017 Elsevier B.V. All rights reserved.
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Purpose This study aims to address the following research questions: Do the two types of service firms (individual or aggregator) have similar competitiveness on online search ads? How should the two types of service firms select ...
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Purpose This study aims to address the following research questions: Do the two types of service firms (individual or aggregator) have similar competitiveness on online search ads? How should the two types of service firms select optimal branded keywords to improve search performance? In addition, how do consumers' search queries influence the service search performance of the two types of service firms?
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We introduce and test a behavioral model of consumer product search that extends a baseline normative model of sequential search by incorporating nonnormative influences that are local in the sense that they reflect consumers' und...
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We introduce and test a behavioral model of consumer product search that extends a baseline normative model of sequential search by incorporating nonnormative influences that are local in the sense that they reflect consumers' undue sensitivity to recently encountered alternatives. We propose two types of such local behavioral influences that, at each stage of a search process, can manifest themselves both in which of the products inspected up to that point is deemed to be the most preferred one (the product comparison decision) and whether to terminate the search at that stage (the stopping decision). The first of these influences is that consumers respond excessively to the attractiveness of the currently inspected product, at the expense of all others ("focalism"). The second proposed behavioral influence is that consumers overreact to the difference in attractiveness between the current product and the one encountered just prior to it ("local contrast"). Converging evidence from two experiments, which combine to guarantee both high internal and high external validity, provides support for the proposed behavioral influences. Our findings demonstrate that consumers' product comparison and stopping decisions in sequential product search are jointly governed by normative principles and by the proposed local behavioral influences.
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We study the identification of the search method consumers use when resolving uncertainty in the prices of alternatives. We show that the search method-simultaneous or sequential-is identified with data on consumers' consideration...
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We study the identification of the search method consumers use when resolving uncertainty in the prices of alternatives. We show that the search method-simultaneous or sequential-is identified with data on consumers' consideration sets (but not the sequence of searches), prices for the considered alternatives and marketwide price distributions. We show that identification comes from differences in the patterns of actual prices in consumers' consideration sets across search methods. We also provide a new estimation approach for the sequential search model that uses such data. Using data on consumer shopping behavior in the U.S. auto insurance industry that contain information on consideration sets and choices, we find that the pattern of actual prices in consumers' consideration sets is consistent with consumers searching simultaneously. Via counterfactuals we show that the consideration set and purchase market shares of the largest insurance companies are overpredicted under the incorrect assumption of sequential search. As the search method affects consumers' consideration sets, which in turn influence brand choices, understanding the nature of consumer search and its implications for consideration and choice is important from a managerial perspective.
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In many markets, consumers visit stores and physically inspect products before making purchase decisions. We view the inspection of a product at a retail location as a search for product fit. We quantify the cost and benefit from ...
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In many markets, consumers visit stores and physically inspect products before making purchase decisions. We view the inspection of a product at a retail location as a search for product fit. We quantify the cost and benefit from searching for product fit using a discrete choice model of demand with optimal sequential search. In these models, the benefit of searching is measured by the standard deviation of the product fit and has, heretofore, been fixed to one in estimation. We show that, with an exogenous search cost shifter, both the cost and benefit of searching can be separately estimated. Our empirical setting is the U.S. automotive market. We assemble a unique data set containing individual-level smartphone geolocation data that inform us about dealership visits. We also obtain information on new vehicle purchases from proprietary DMV registration data. Our exogenous cost shifter is the distance a consumer must travel to visit a dealership. Our results show that the benefit provided by dealerships to consumers is substantial. Within our empirical context, failure to estimate the standard deviation of the product fit leads to biased search cost and consumer surplus estimates and to inaccurate predictions regarding consumers' number of searches and effects of at-home test drive programs.
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