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Demand effects of consumers’ stated and revealed preferences

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  • Engström, Per

    ()
    (Department of Economics)

  • Forsell, Eskil

    ()
    (Department of Economics)

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    Abstract

    Knowledge of how consumers react to different quality signals is fundamental for understanding how markets work. We study the online market- place for Android apps where we compare the causal effects on demand from two quality related signals; other consumers' stated and revealed preferences toward an app. Our main result is that consumers are much more responsive to other consumers' revealed preferences, compared to others' stated preferences. A 10 percentile increase in displayed average rating only increases downloads by about 3 percent, while a 10 percentile increase in displayed number of downloads increases downloads by about 20 percent.

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    File URL: http://uu.diva-portal.org/smash/get/diva2:617197/FULLTEXT01.pdf
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    Bibliographic Info

    Paper provided by Uppsala University, Department of Economics in its series Working Paper Series with number 2013:6.

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    Length: 27 pages
    Date of creation: 19 Apr 2013
    Date of revision:
    Handle: RePEc:hhs:uunewp:2013_006

    Contact details of provider:
    Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
    Phone: + 46 18 471 25 00
    Fax: + 46 18 471 14 78
    Email:
    Web page: http://www.nek.uu.se/
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    Related research

    Keywords: peer effects; observational Learning; stated preferences; revealed preferences; eWOM; Google play; Android apps; regression discontinuity design; instrumental variable analysis;

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    16. David A. Reinstein & Christopher M. Snyder, 2005. "THE INFLUENCE OF EXPERT REVIEWS ON CONSUMER DEMAND FOR EXPERIENCE GOODS: A CASE STUDY OF MOVIE CRITICS -super-* ," Journal of Industrial Economics, Wiley Blackwell, vol. 53(1), pages 27-51, 03.
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