Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/246318 
Year of Publication: 
2021
Series/Report no.: 
Working Paper No. 2101
Publisher: 
Johannes Kepler University of Linz, Department of Economics, Linz
Abstract: 
In this article, we provide a novel measure of product differentiation by observing consumer search behavior directly. We track individual consumers in a price search engine and generate a measure of distance in product space, based on goods surveyed conjointly within individual search episodes. This metric performs well in an application to digital cameras as an example of complex products. Regression results show that differences in product characteristics are correlated with our measure of distance to a surprisingly high degree, and that prices are significantly lower if products have to compete with a larger number of close substitutes.
Subjects: 
product differentiation
characteristic space
consumer search
price searchengine
clickstream
JEL: 
D83
D43
L13
L63
Document Type: 
Working Paper

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