Consumer Search, Steering and Choice Overload

Patrick Rey and Volker Nocke

No 21-1239, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: In this paper, we develop a model of within-firm sequential, directed search and study a firm’s ability and incentive to steer consumers. The paper’s main insight is that the firm often benefits from garbling the information it provides to consumers. This induces consumers to keep searching but discourages some of them from visiting the firm—a form of garbling overload. The incentive to garble the information arises even though the firm and the consumers have in common the interest of maximizing the probability of trade—in particular, the setting abstracts from any self-preferencing or bias in favor of particular products. Because of information garbling, an increase in the size of the product line further discourages consumers from visiting the firm—consistent with choice overload.

Keywords: Sequential consumer search; product variety; choice overload; multi-product firm; platform (search for similar items in EconPapers)
JEL-codes: D42 L12 L15 (search for similar items in EconPapers)
Date: 2021-08-24, Revised 2023-05-10
New Economics Papers: this item is included in nep-com, nep-cwa, nep-dcm, nep-ind, nep-isf, nep-mic and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.tse-fr.eu/sites/default/files/TSE/docu ... 2021/wp_tse_1239.pdf Full Text (application/pdf)

Related works:
Journal Article: Consumer Search, Steering, and Choice Overload (2024)
Working Paper: Consumer search, steering and choice overload (2024)
Working Paper: Consumer Search, Steering and Choice Overload (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:125850

Access Statistics for this paper

More papers in TSE Working Papers from Toulouse School of Economics (TSE) Contact information at EDIRC.
Bibliographic data for series maintained by ().