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Consumer Search: Evidence from Path-tracking Data

Listed author(s):
  • Fabio Pinna
  • Stephan Seiler
Registered author(s):

    We estimate the effect of consumer search on the price of the purchased product in a physical store environment. We implement the analysis using a unique data set obtained from radio frequency identification tags, which are attached to supermarket shopping carts. This technology allows us to record consumers' purchases as well as the time they spent in front of the shelf when contemplating which product to buy, giving us a direct measure of search effort. Controlling for a host of confounding factors, we estimate that an additional minute spent searching lowers price paid by $2.10 which represents 8 percent of average trip-level expenditure.

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    File URL: http://cep.lse.ac.uk/pubs/download/dp1296.pdf
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    Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp1296.

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    Date of creation: Sep 2014
    Handle: RePEc:cep:cepdps:dp1296
    Contact details of provider: Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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    1. Hoyer, Wayne D, 1984. " An Examination of Consumer Decision Making for a Common Repeat Purchase Product," Journal of Consumer Research, Oxford University Press, vol. 11(3), pages 822-829, December.
    2. Babur De Los Santos & Ali Hortacsu & Matthijs R. Wildenbeest, 2012. "Testing Models of Consumer Search Using Data on Web Browsing and Purchasing Behavior," American Economic Review, American Economic Association, vol. 102(6), pages 2955-2980, October.
    3. Stephan Seiler, 2013. "The impact of search costs on consumer behavior: A dynamic approach," Quantitative Marketing and Economics (QME), Springer, vol. 11(2), pages 155-203, June.
    4. Draganska, Michaela & Klapper, Daniel, 2010. "Choice Set Heterogeneity and the Role of Advertising: An Analysis with Micro and Macro Data," Research Papers 2063, Stanford University, Graduate School of Business.
    5. Sam K. Hui & Peter S. Fader & Eric T. Bradlow, 2009. "Path Data in Marketing: An Integrative Framework and Prospectus for Model Building," Marketing Science, INFORMS, vol. 28(2), pages 320-335, 03-04.
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