Search Gaps and Consumer Fatigue

Abstract

In the canonical sequential search model, consumers inspect options consecutively until they decide to stop searching, a decision which occurs only once before consumers determine whether and what to purchase. However, using data on consumers’ online browsing histories, we document that consumers frequently take breaks during their search (“search gaps”), that is, they obtain information on a number of options, pause, and later resume their search. Further, we provide model-free evidence that consumers take breaks from searching due to fatigue. To describe search processes that include gaps due to fatigue, we extend the Weitzman (1979) framework and develop a sequential search model that rationalizes search gaps by allowing consumers to additionally decide when to search an option: now or after a break. Fatigue enters the model through increasing search costs: the more a consumer searches, the higher her search costs per option; taking a break reduces these costs to a baseline and enables the consumer to resume her search at a later time. We estimate the proposed model using our data and quantify the effect of fatigue on consumer search and purchase decisions. We find the effect of fatigue to be larger than that of baseline search costs. Lastly, we illustrate the impact of search gaps and consumer fatigue on market outcomes via counterfactuals.

Keywords: Sequential Search, Search Fatigue, Search Delay, Online Browsing, Apparel Industry

JEL Classification: D83, L81, M31