Download or read book Consumer Search and the Uncertainty Effect written by Heiko Karle and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Consumer Search Behavior and Its Effect on Markets written by Brian T. Ratchford and published by Now Publishers Inc. This book was released on 2009 with total page 89 pages. Available in PDF, EPUB and Kindle. Book excerpt: Consumer Search Behavior and its Effect on Markets focuses on the consumer side of the market, on what is known about how consumers search for needed information, and on how this impacts the behavior of markets. The author discusses three broad strands of this literature -- normative models of search and their application to consumer search; empirical studies of the search process; and implications of consumer search for the behavior of markets, including pricing, advertising and retailing. In general, the author examines external search -- the search for information from sources other than memory. Particular attention is paid to the impact of the Internet on markets. Consumer Search Behavior and its Effect on Markets also examines the broader issues about alternatives considered, sources consulted, extent of consumer knowledge, and the impact of these factors on markets and marketing institutions.

Download or read book Rethinking Uncertainty and Risk in Consumer Research written by Yang He and published by . This book was released on 2016 with total page 250 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this dissertation I provide a critical review of past literature on uncertainty and risk in consumer research, and discuss opportunities for new cross-paradigm research. In Chapter 2 I review past literature on the relationship between the mating mindset and risk-seeking behavior and posit an alternative explanation that consolidates inconsistencies across past findings. Chapter 3 reviews a past research that suggests uncertainty leads to overestimation in long-term consumer budgets. I provide evidence to show that construal level theory may be more adequate in explaining this over-budgeting phenomenon. In Chapter 4 I discuss the potential impact of uncertainty on consumers' cognitive capabilities, a relationship less considered in past literature. I show that while the feeling of uncertainty boosts one's ability to receive information, the newly received raw information may not be properly processed due to uncertainty-related anxiety.

Download or read book Consumer Search and Public Policy written by Howard Beales and published by . This book was released on 1980 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Consumer Information Search Revisited written by Sridhar Moorthy and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: A comprehensive theoretical framework for understanding consumers information search behavior is presented. Unlike previous research, our model not only identifies what factors affect consumers search behavior, but also how they interact with each other. In particular, it emphasizes the interactive effect of prior market perceptions on the search process. We argue that when consumers have brand-specific prior distributions, then the existence of relative uncertainty among brands is necessary for a search to be useful. Thus we explain why product class involvement or low search costs may not be sufficient to induce large amounts of search activity, and why there may be an inverse-U shaped relationship between search activity and experience. We test our theory on consumers search behavior for new automobiles, using data collected contemporaneously with the consumers actual decision process. Our data support our theory.

Download or read book Three Essays on Consumer Behavior Under Uncertainty written by Koichi Yonezawa and published by . This book was released on 2014 with total page 191 pages. Available in PDF, EPUB and Kindle. Book excerpt: It is well understood that decisions made under uncertainty differ from those made without risk in important and significant ways. Yet, there is very little research into how uncertainty manifests itself in the most ubiquitous of decision-making environments: Consumers' day-to-day decisions over where to shop, and what to buy for their daily grocery needs. Facing a choice between stores that either offer relatively stable "everyday low prices" (EDLP) or variable prices that reflect aggressive promotion strategies (HILO), consumers have to choose stores under price-uncertainty. I find that consumers' attitudes toward risk are critically important in determining store-choice, and that heterogeneity in risk attitudes explains the co-existence of EDLP and HILO stores - an equilibrium that was previously explained in somewhat unsatisfying ways. After choosing a store, consumers face another source of risk. While knowing the quality or taste of established brands, consumers have very little information about new products. Consequently, consumers tend to choose smaller package sizes for new products, which limits their exposure to the risk that the product does not meet their prior expectations. While the observation that consumers purchase small amounts of new products is not new, I show how this practice is fully consistent with optimal purchase decision-making by utility-maximizing consumers. I then use this insight to explain how manufacturers of consumer packaged goods (CPGs) respond to higher production costs. Because consumers base their purchase decisions in part on package size, manufacturers can use package size as a competitive tool in order to raise margins in the face of higher production costs. While others have argued that manufacturers reduce package sizes as a means of raising unit-prices (prices per unit of volume) in a hidden way, I show that the more important effect is a competitive one: Changes in package size can soften price competition, so manufacturers need not rely on fooling consumers in order to pass-through cost increases through changes in package size. The broader implications of consumer behavior under risk are dramatic. First, risk perceptions affect consumers' store choice and product choice patterns in ways that can be exploited by both retailers and manufacturers. Second, strategic considerations prevent manufacturers from manipulating package size in ways that seem designed to trick consumers. Third, many services are also offered as packages, and also involve uncertainty, so the effects identified here are likely to be pervasive throughout the consumer economy.

Download or read book Search Duration written by Raluca Ursu and published by . This book was released on 2018 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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 where 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 (1979) sequential search model. We build on the framework by Chick and Frazier [Chick, S., P. Frazier. 2012. Sequential Sampling with Economics of Selection Procedures. Management Sci. 58(3), 1-16] for describing the optimal search rules for the full set of decisions consumers make (which products to search, for how long, 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 consumer preferences, search costs, and prior uncertainty parameters. We find that consumers start their search with high initial uncertainty, which rationalizes their choice to search few options intensively in the presence of search costs. In counterfactual simulations, we analyze the effect of prior uncertainty and search environment on consumer choices.

Download or read book Three Essays on Consumer Search Behaviour in Experimental Market Environments written by Changxia Ke and published by . This book was released on 2010 with total page 220 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis investigates consumer search behavior in different contexts and its implications on certain market outcomes. It consists of three self-contained essays. Part one investigates if people search optimally and how price promotions (such as the provision of price discounts) influence search intensity and risk-taking behavior. We start with a typical sequential search task in a finite time horizon (with exogenously determined price dispersion) as the baseline treatment. In the two experimental treatments, exogenous discounts are introduced to the search process. The treatments differ in the amount of information on the discounts revealed to the subjects. Subjects' search behavior is roughly consistent with optimality for a risk-neutral agent, but significantly influenced by the introduction of discount vouchers. We find that subjects' search intensity is significantly reduced if they are in a shop that offers discounts, even when the monetary benefit induced by the discount has been taken into account. This suggests that people seem to gain extra non-monetary utility from buying a discounted product. Alternatively, subjects might overestimate the value of a discount. Following the findings in part one, we focus on price-framing effects of discounts on consumer search behavior in part two. In order to isolate the price-framing effect from all other possible influences, we adopt an extremely simple two-shop search model in which a consumer who sees the price for an item in a shop has to decide either to buy it or to incur a search cost to learn the ex-ante uncertain price in a second shop. The experiment is designed such that a rational buyer should make identical decisions in the base treatment (where prices are posted as net prices in both shops) and in the experimental treatments (where the price in one of the shops is framed as a gross price with a discount, holding the net-price constant). Using structural estimation of the observed risk preferences, we find that people tend to be more risk-averse and hence buy from the initial shop more often in the discount treatments, regardless of where the discount is offered. The seemingly trivial change to a discount-framing increases the complexity of the decision problem. Subjects reveal a tendency to stick with the comparatively less complex options more frequently as the complexity of the decision problem increases. However, this bias declines with experience, as subjects become more and more familiar with the framing. In part three, we study search behavior in a market experiment, where prices are determined endogenously by human players. More specifically, we examine the behavioral factors and the underlying mechanism which drive the widely observed asymmetric price adjustment to cost shocks (in a world with costly search behavior and information asymmetry). We show that price dispersion, as well as asymmetric price adjustment to cost shocks, arises in experimental markets, even though the standard theory predicts neither. We find that after controlling all the potential theoretical factors, the observed price dispersion can be explained by the presence of bounded rational play. Under price dispersion, asymmetric price adjustment arises naturally, as it is harder for buyers to learn that a negative cost shock has taken place. Learning is much quicker after a positive shock.

Download or read book Product Fit Uncertainty in Online Markets written by Yili Hong and published by . This book was released on 2016 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Product fit uncertainty (defined as the degree to which a consumer cannot assess whether a product's attributes match her preference) is proposed to be a major impediment to online markets with costly product returns and lack of consumer satisfaction. We conceptualize the nature of product fit uncertainty as an information problem and theorize its distinct effect on product returns and consumer satisfaction (versus product quality uncertainty), particularly for experience (versus search) goods without product familiarity. To reduce product fit uncertainty, we propose two Internet-enabled systems - website media (visualization systems) and online product forums (collaborative shopping systems) - that are hypothesized to attenuate the negative effect of product type (experience versus search goods) on product fit uncertainty. Hypotheses that link experience goods to product returns through the mediating role of product fit uncertainty are tested with analyses of a unique dataset composed of secondary data matched with primary direct data from numerous consumers who had recently participated in buy-it-now auctions. The results show the distinction between product fit uncertainty and quality uncertainty as two distinct dimensions of product uncertainty, and interestingly show that, relative to product quality uncertainty, product fit uncertainty has a significantly stronger effect on product returns. Notably, while product quality uncertainty is mainly driven by the experience attributes of a product, product fit uncertainty is mainly driven by both experience attributes and lack of product familiarity. The results also suggest that Internet-enabled systems are differentially used to reduce product (fit and quality) uncertainty. Notably, the use of online product forums is shown to moderate the effect of experience goods on product fit uncertainty, while website media are shown to attenuate the effect of experience goods on product quality uncertainty. The results are robust to econometric specifications and estimation methods. The paper concludes by stressing the importance of reducing the increasingly-prevalent information problem of product fit uncertainty in online markets with the aid of Internet-enabled systems.

Download or read book The Impact of Consumer Search Cost on Assortment Planning and Pricing written by Ruxian Wang and published by . This book was released on 2017 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: Consumers search for product information to resolve valuation uncertainties before purchase. We incorporate search cost into consumer choice models and study the two-stage consider-then-choose policy. In the first stage, a consumer forms her consideration set by balancing utility uncertainty and search cost; in the second stage, she evaluates all products in her consideration set and chooses the one with the highest net utility. We show that the revenue-ordered assortment (i.e., the offer set that includes products in the revenue-decreasing order) fails to be optimal, although it can obtain at least half the optimal revenue. We propose a k-quasi attractiveness-ordered assortment and show that it can be arbitrarily near-optimal for the market share maximization problem. The assortment problems with search cost are generally NP-hard, so we develop efficient approximation or relatively fast exact algorithms for a variety of assortment problems under the consider-then-choose models with search cost. For the joint assortment planning and pricing problem with homogeneous consumers, we show that the intrinsic-utility-ordered assortment and the quasi-same-price policy, which charges the same price for all products except at most one, are optimal.

Download or read book Consumer Information Search and Choice in Retail Markets written by Sonika Singh and published by . This book was released on 2012 with total page 220 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the third essay, I analyze the impact of online information search on product search in the used durables market. The model is estimated using data from the used car market. In the presence of uncertainty and greater perceived risk, the need for additional information could influence consumer search. Contrary to prior findings that search is limited, the results show that online information search on dealer websites and third party information websites increases search for used cars in the online as well as offline medium.

Download or read book Consumer Online Search and New product Marketing written by Ho Kim and published by . This book was released on 2013 with total page 136 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation contains three essays that study the implications of online search activity for new-product marketing. Using the U.S. motion picture industry as a test case, the first essay examines the dynamic causal relationship between traditional media, consumers' media generation activity, media consumption activity, and market demand of movies. Consumers' media generation and consumption activities around movies are operationalized by the blog volume and search volume of those movies. I develop three separate models--a pre-launch period model, a post-launch period model, and an opening-week model--and examine the relationship between them separately for each period. As the focal variables are jointly determined, I introduce instruments and explain how to correct for endogeneity bias. I find that consumer searching activity is a key mediator between advertising, consumer blogging activity, and market demand. The second essay examines the pre-launch advertising effectiveness of new products using online search indexes as the response variable. I model the relationship between the advertising schedule and the online search volume process during the pre-launch period of movies. The model incorporates consumers' willingness-to-search and the time-varying effectiveness of advertising as key elements that influence online search volume at specific times. The model is represented in a Bayesian dynamic linear model framework and applied to the U.S. movie industry. The empirical analysis reveals important features of consumers' pre-launch interest development for new products. First, consumers' pre-launch responses to advertising are substantially influenced by the timing of advertising. Second, advertising effectiveness varies over time as a function of past advertising outlay. Third, the time-to-launch effect and time-varying advertising effectiveness vary substantially across movies. The estimation results are used to suggest a more effective pre-launch advertising schedule. The third essay provides an explanation of the varying predictive power of online search volume by examining the effects of consumers' quality perception on the search activity for and actual demand of new products. I hypothesize that both the perceived quality and quality uncertainty of a new product increase consumers' search activity for the new product, while only perceived quality positively influences the conversion of search activity into actual demand. Using the U.S. movie industry as a test case, I find that both perceived quality and quality uncertainty are positively associated with the pre-launch search volume of movies, whereas only perceived quality positively influences the conversion of pre-launch searches into opening-week revenue. Similar findings are maintained in the post-launch period analysis. These findings imply that systematic over-/under-prediction of market success may occur if managers use an online search index without considering the effects of quality and quality uncertainty of new products.

Download or read book Essays on Consumer Search and Interlocking Directorates written by Silva Deželan and published by Rozenberg Publishers. This book was released on 2001 with total page 157 pages. Available in PDF, EPUB and Kindle. Book excerpt: Information is crucial to make good decisions, but obtaining and providing information often comes at a cost. Consumers and firms both need to balance these costs and benefits of obtaining and providing information in order to make the best decisions. The research in this thesis investigates several questions that pertain to the acquisition and provision of information. In the first part of this thesis it is assumed that consumers are not fully informed about the prices or availability of a product they want to buy. Consumers can search for information, but this comes at a cost. At the same time, shops can influence these costs. In the first two studies in this part, shops have the possibility to advertise. An advertisement provides information to consumers and reduces the search costs. We investigate, among other things, the pricing behavior of shops and the relation between search and advertising. The third study in this part of the thesis considers the location choice of shops. Locating together in a shopping mall reduces the search costs of consumers. This increases the competition between shops and lowers the prices, but we show that at the same time the sales volume increases. The total effect of locating together on profits is generally positive. The second part of this thesis considers director ties (also named interlocks). A director who has several directorships in different firms can serve as an information bridge between the different firms. At the same time, interlocking directors are busy and form a homogenous group. Data from the Netherlands show that in The Netherlands the positive information providing effect of interlocks is outweighed by a negative busyness and homogenous group effect.

Download or read book Determinants of the Consumer s Search for Information written by Jung Sung Yeo and published by . This book was released on 1986 with total page 248 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Consumer Perception of Product Risks and Benefits written by Gerard Emilien and published by Springer. This book was released on 2017-03-14 with total page 600 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book reflects the current thinking and research on how consumers’ perception of product risks and benefits affects their behavior. It provides the scientific, regulatory and industrial research community with a conceptual and methodological reference point for studies on consumer behavior and marketing. The contributions address various aspects of consumer psychology and behavior, risk perception and communication, marketing research strategies, as well as consumer product regulation. The book is divided into 4 parts: Product risks; Perception of product risks and benefits; Consumer behavior; Regulation and responsibility.

Download or read book Risk Uncertainty and Profit written by Frank H. Knight and published by Cosimo, Inc.. This book was released on 2006-11-01 with total page 401 pages. Available in PDF, EPUB and Kindle. Book excerpt: A timeless classic of economic theory that remains fascinating and pertinent today, this is Frank Knight's famous explanation of why perfect competition cannot eliminate profits, the important differences between "risk" and "uncertainty," and the vital role of the entrepreneur in profitmaking. Based on Knight's PhD dissertation, this 1921 work, balancing theory with fact to come to stunning insights, is a distinct pleasure to read. FRANK H. KNIGHT (1885-1972) is considered by some the greatest American scholar of economics of the 20th century. An economics professor at the University of Chicago from 1927 until 1955, he was one of the founders of the Chicago school of economics, which influenced Milton Friedman and George Stigler.

Download or read book Sensation Seeking and Risky Behavior written by Marvin Zuckerman and published by American Psychological Association (APA). This book was released on 2007 with total page 336 pages. Available in PDF, EPUB and Kindle. Book excerpt: Risky behavior can be an expression of a normal, genetically influenced personality trait--sensation seeking. In this fascinating and accessible book, the author offers a comprehensive view of the role of sensation seeking in a wide range of behaviors, from risky driving sports through substance use, sex, crime, or other antisocial behaviors.