Buying Online: Sequential Decision Making by Shopbot Visitors

28 Pages Posted: 2 Dec 2008

See all articles by Uwe Dulleck

Uwe Dulleck

Queensland University of Technology - School of Economics and Finance

Franz Hackl

Johannes Kepler University Linz - Department of Economics

Bernhard Weiss

Johannes Kepler University Linz

Rudolf Winter-Ebmer

Johannes Kepler University Linz - Department of Economics; Institute for Advanced Studies (IHS) - Department of Economics & Finance; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Date Written: August 2008

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.

Keywords: decision theory, e-commerce, heuristics, price comparison, seller reputation

JEL Classification: D83, L81

Suggested Citation

Dulleck, Uwe and Hackl, Franz and Weiss, Bernhard and Winter-Ebmer, Rudolf, Buying Online: Sequential Decision Making by Shopbot Visitors (August 2008). CEPR Discussion Paper No. DP6939. Available at SSRN: https://ssrn.com/abstract=1307529

Uwe Dulleck (Contact Author)

Queensland University of Technology - School of Economics and Finance ( email )

GPO Box 2434
2 George Street
Brisbane, Queensland 4001
Australia

Franz Hackl

Johannes Kepler University Linz - Department of Economics ( email )

Altenbergerstrasse 69
A-4040 Linz, 4040
Austria

HOME PAGE: http://www.economics.uni-linz.ac.at/hackl

Bernhard Weiss

Johannes Kepler University Linz ( email )

Altenbergerstr. 69
A-4040 Linz, Uper Austria 4040
Austria

Rudolf Winter-Ebmer

Johannes Kepler University Linz - Department of Economics ( email )

Altenbergerstrasse 69
A-4040 Linz, 4040
Austria
+43 732 2468 8236 (Phone)
+43 732 2468 8238 (Fax)

HOME PAGE: http://www.econ.jku.at/winter

Institute for Advanced Studies (IHS) - Department of Economics & Finance ( email )

Stumpergasse 56
A-1060 Vienna, A-1060
Austria

HOME PAGE: http://www.ihs.ac.at

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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