Raluca M. Ursu (),
Qingliang Wang () and
Pradeep K. Chintagunta ()
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Raluca M. Ursu: Stern School of Business, New York University, New York, New York 10012
Qingliang Wang: School of Management, Northwestern Polytechnical University, 710072 Xi’an, Shaanxi, China
Pradeep K. Chintagunta: Booth School of Business, University of Chicago, Chicago, Illinois 60637
Marketing Science, 2020, vol. 39, issue 5, 849-871
In studying consumer search behavior, researchers typically focus on which products consumers add to their consideration sets (the extensive margin of search). In this article, we attempt to additionally study how much consumers search individual products (the intensive margin of search) by analyzing the time they spend searching (search duration). We develop a sequential search model by which consumers who are uncertain (and have prior beliefs) about their match value for a product search to reveal (noisy) signals about it that they then use to update their beliefs in a Bayesian fashion. Search duration, in this context, is an outcome of the decision by a consumer to seek information on the same product multiple times; with a unit of time corresponding to one signal, the more the number of signals sought greater is the search duration. We also show how the model can be used to study revisits, a feature not easily accommodated in Weitzman’s sequential search model. We build on the framework by Chick and Frazier for describing the optimal search rules for the full set of decisions consumers make (which products to search, for how long, in what order, and whether to purchase) and develop the model’s empirical counterpart. We estimate the proposed model using data on consumers searching for restaurants online. We document that search duration is considerable, even when consumers search few restaurants, and that restaurants that are searched longer are more likely to be purchased. Using our model, we quantify preferences and search costs, as well as consumer prior beliefs, providing additional insights into consumers’ search process. Finally, we develop managerial implications related to the amount of information companies should provide to consumers, given that this will affect search duration and thus search and purchase decisions.
Keywords: search duration; search with learning; revisits; optimal search rules; sequential sampling; online consumer search (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormksc:v:39:y:2020:i:5:p:849-871
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