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Buying Online: Sequential Decision Making by Shopbot Visitors

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  • Winter-Ebmer, Rudolf
  • Dulleck, Uwe
  • Hackl, Franz
  • Weiss, Bernhard

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

  • Winter-Ebmer, Rudolf & Dulleck, Uwe & Hackl, Franz & Weiss, Bernhard, 2008. "Buying Online: Sequential Decision Making by Shopbot Visitors," CEPR Discussion Papers 6939, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:6939
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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

    Decision theory; E-commerce; Heuristics; Price comparison; Seller reputation;
    All these keywords.

    JEL classification:

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

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