Prior Information and Consumer Search: Evidence from Eye Tracking

Raluca Mihaela Ursu (), Tülin Erdem (), Qingliang Wang () and Qianyun Zhang ()
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Raluca Mihaela Ursu: Stern School of Business, New York University, New York, New York 10012
Tülin Erdem: Stern School of Business, New York University, New York, New York 10012
Qingliang Wang: School of Management, Xi’an Jiaotong University, Xi’an, Shaanxi 710049, P.R. China
Qianyun Zhang: Stern School of Business, New York University, New York, New York 10012

Management Science, 2024, vol. 70, issue 12, 8685-8708

Abstract: Do consumers search the brands they know more or less frequently than the brands with which they are unfamiliar? In this paper, we attempt to answer this question using data from an experiment with two novel features: (i) survey information on consumers’ prior brand ownership, familiarity with each brand, and prior experience using different product features and (ii) eye-tracking data capturing search behavior at a very granular level. We find that consumers are generally more likely to search and buy brands they own and with which they are familiar, highlighting the importance of accounting for prior information. For this reason, we develop a search model in which both the information obtained during the search process and the information possessed by consumers prior to search are allowed to influence search and purchase decisions. Our model contributes to prior work by modeling search at the brand and attribute levels within a Bayesian learning framework. Using this model, we then quantify the impact of prior information on consumer choices as well as document the estimation bias arising when prior information is absent from the model. Finally, through a series of counterfactuals, we explore the managerial value of prior information data.

Keywords: consumer search; search with learning; prior information; eye tracking (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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