Weiss, Bernhard Dulleck, Uwe Hackl, Franz Winter-Ebmer, Rudolf
Year of Publication:
Working Paper, Department of Economics, Johannes Kepler University of Linz 0810
In this article we propose a two stage procedure to model demand decisions by customers who are balancing several dimensions of a product. We then test our procedure by analyzing the behavior of buyers from an Austrian price comparison site. Although in such a market a consumer will typically search for the cheapest price for a given product, reliability and service of the supplier are other important characteristics of a retailer. In our data, consumers follow such a two stage procedure: they select a shortlist of suppliers by using the price variable only; finally, they trade off reliability and price among these shortlisted suppliers.
e-commerce price comparison decision theory heuristics seller reputation