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Buying Online: Sequential Decision Making by Shopbot Visitors

Author

Listed:
  • Uwe Dulleck

    (QUT)

  • Franz Hackl

    (JKU Linz, Austria)

  • Bernhard Weiss

    (JKU Linz, Austria)

  • Rudolf Winter-Ebmer

Abstract

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.

Suggested Citation

  • Uwe Dulleck & Franz Hackl & Bernhard Weiss & Rudolf Winter-Ebmer, 2008. "Buying Online: Sequential Decision Making by Shopbot Visitors," NCER Working Paper Series 31, National Centre for Econometric Research.
    • Handle: RePEc:qut:auncer:2008-20
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    File URL: http://www.ncer.edu.au/papers/documents/NCER_WpNo31Aug08.pdf
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    References listed on IDEAS

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    Cited by:

    1. Yusufcan Masatlioglu & Daisuke Nakajima & Erkut Y. Ozbay, 2012. "Revealed Attention," American Economic Review, American Economic Association, vol. 102(5), pages 2183-2205, August.
    2. Michelle Haynes & Steve Thompson, 2014. "Hit and Run or Sit and Wait? Contestability Revisited in a Price-Comparison Site-Mediated Market," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 21(2), pages 165-190, July.

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    More about this item

    Keywords

    e-commerce; price comparison; decision theory; heuristics; seller reputation;
    All these keywords.

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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