Consumer Decision-Making at an Internet Shopbot

33 Pages Posted: 19 Nov 2001  

Michael D. Smith

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Erik Brynjolfsson

Massachusetts Institute of Technology (MIT) - Sloan School of Management; National Bureau of Economic Research (NBER)

Date Written: October 2001

Abstract

Internet shopbots compare prices and service levels at competing retailers, creating a laboratory for analyzing consumer choice. We analyze 20,268 shopbot consumers who select various books from 33 retailers over 69 days for a total of 1,512,856 observed offers. Although each retailer offers a homogeneous product, we find that brand is an important determinant of consumer choice. Consumers use brand as a proxy for retailer credibility in non-contractible aspects of the product and service bundle, such as shipping reliability. Our results also suggest that consumers are sensitive to how total price is allocated between the item price, shipping price, and tax.

Suggested Citation

Smith, Michael D. and Brynjolfsson, Erik, Consumer Decision-Making at an Internet Shopbot (October 2001). MIT Sloan School of Management Working Paper No. 4206-01. Available at SSRN: https://ssrn.com/abstract=290334 or http://dx.doi.org/10.2139/ssrn.290334

Michael D. Smith

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States

HOME PAGE: http://www.heinz.cmu.edu/~mds

Erik Brynjolfsson (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

E53-313
Cambridge, MA 02142
United States
617-253-4319 (Phone)

HOME PAGE: http://digital.mit.edu/erik

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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