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Limited Attention, Salience and Changing Prices: Evidence from a Field Experiment in Online Supermarket Shopping

53 Pages Posted: 8 May 2017  

Kfir Eliaz

Brown University

Orli Oren-Kolbinger

University of Michigan Law School

Sarit Weisburd

Tel Aviv University

Date Written: May 2017

Abstract

How do consumers allocate their attention over price fluctuations in multiple products, and how do they respond to information on these price changes? We address these questions using data from a field experiment on a website that offers purchase and delivery from one large local supermarket chain in the U.S. Our main findings indicate that (i) a large proportion of consumers forego significant saving opportunities that they were aware of, (ii) consumers are more likely to compare prices between substitutes that appear close to each other, and (iii) personalized "nudges" have a differential effect on consumers. Furthermore, we propose a typology of shoppers and shopping trips, based on a level of attentiveness, and show that nudges and information provision helps only the "attentive" shoppers.

Suggested Citation

Eliaz, Kfir and Oren-Kolbinger, Orli and Weisburd, Sarit, Limited Attention, Salience and Changing Prices: Evidence from a Field Experiment in Online Supermarket Shopping (May 2017). CEPR Discussion Paper No. DP12014. Available at SSRN: https://ssrn.com/abstract=2964837

Kfir Eliaz (Contact Author)

Brown University ( email )

Economics Dept.
Box B
Providence, RI 02912
United States
401-863-2112 (Phone)
401-863-1970 (Fax)

HOME PAGE: http://www.econ.brown.edu/fac/Kfir_Eliaz/

Orli Oren-Kolbinger

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States

Sarit Weisburd

Tel Aviv University ( email )

Ramat Aviv
Tel-Aviv, 6997801
Israel

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