Told vs. Old: A Textbook Experiment Evaluating Price Beliefs and Consumer Search

44 Pages Posted: 14 Feb 2018

See all articles by Forrest Spence

Forrest Spence

University of Notre Dame - Department of Economics

Uyen Tran

University of Chicago - Booth School of Business

Date Written: February 2, 2018

Abstract

We conduct a field experiment with 2,449 consumers in a college textbook market, treating a subset of participants with price information for assigned textbooks at online and offline retailers. We investigate how incomplete information affects search and purchase behavior across different levels of consumer experience. Our findings reveal three key insights: (1) Price information increases online search and purchases; (2) Price information eliminates experience-based disparities; and (3) Inexperienced consumers become more uncertain about general online textbook prices after receiving specific price information. We highlight the critical role of information in shaping consumer behavior in markets, especially for inexperienced consumers.

Keywords: JEL Codes: D83, D12, L15, I23, D82 Search Behavior, Field Experiment, Consumer Experience, Online Retail

JEL Classification: D83

Suggested Citation

Spence, Forrest and Tran, Uyen, Told vs. Old: A Textbook Experiment Evaluating Price Beliefs and Consumer Search (February 2, 2018). Available at SSRN: https://ssrn.com/abstract=3116470 or http://dx.doi.org/10.2139/ssrn.3116470

Forrest Spence

University of Notre Dame - Department of Economics ( email )

Notre Dame, IN 46556
United States

Uyen Tran (Contact Author)

University of Chicago - Booth School of Business ( email )

401 North 1st Street
Phoenix, AZ 85004
United States
5203335621 (Phone)

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