Multiattribute Search: Empirical Evidence and Information Design

61 Pages Posted: 18 May 2018 Last revised: 13 Jan 2024

See all articles by Pedro Gardete

Pedro Gardete

Nova School of Business and Economics

Megan Hunter

Boston College - Carroll School of Management

Date Written: January 11, 2023

Abstract

The search literature has relied on parsimonious models to recover consumer fundamentals and characterize market outcomes. We investigate simple online search patterns that suggest that the dualistic view of fixed sample vs. sequential search modes is the likely result of coarse data combined with methodological convenience. In contrast with these paradigms, we find consumers are selective about the product attributes they inspect, they revisit items to acquire additional information, and often convert without collecting all available data about the selected alternatives.

Our substantive motivation is the problem of providing information to consumers in a market with differentiated products. We propose a new model of gradual consumer search based on simulated beliefs and “in tandem” decision-tree and likelihood computation that allows us to characterize the full search problem in contexts with moderate numbers of alternatives. We find that the seller's incentives to engage in search design activities tend to match the consumers'.

Keywords: Consumer Search, Information Transmission, Differentiated Markets, Beliefs, Online Retail, Empirical Analysis, Welfare, Incentives

JEL Classification: D12, D82, D83

Suggested Citation

Gardete, Pedro and Hunter, Megan, Multiattribute Search: Empirical Evidence and Information Design (January 11, 2023). Stanford University Graduate School of Business Research Paper No. 3669, Available at SSRN: https://ssrn.com/abstract=3180811 or http://dx.doi.org/10.2139/ssrn.3180811

Pedro Gardete (Contact Author)

Nova School of Business and Economics ( email )

Rua da Holanda, 1
Carcavelos, Lisbon 2775-405
Portugal

HOME PAGE: http://pedrogardete.com

Megan Hunter

Boston College - Carroll School of Management ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

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