Strategic Inattention in Product Search

Svenja Hippel and Adrian Hillenbrand

VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy from Verein für Socialpolitik / German Economic Association

Abstract: Online platforms provide search tools that help consumers to get better-fitting product offers. But this technology makes consumer search behavior also easily traceable and allows for real-time price discrimination. Consumers face a trade-off: Search intensely and receive a better fit at a potentially higher price or restrict search behavior – be strategically inattentive – and receive a worse fit, but maybe a better deal. We study the resulting strategic buyer-seller interaction theoretically as well as experimentally. Our experimental results show that it is the sellers and not the buyers who profit from these search tools.

Keywords: strategic inattention; price discrimination; information transmission; consumer choice; experiment (search for similar items in EconPapers)
JEL-codes: D11 D42 D82 D83 L11 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-com and nep-exp
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc18:181510

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