Repeated Price Search
Consumers check few sites in online purchases. Previous research and experiments we perform demonstrate that consumers can not calculate the optimal strategy for price search. They use heuristics whose performance is better than random and less than optimal. To investigate online price search perfor...
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Published in: | Computational economics Vol. 39; no. 3; pp. 243 - 257 |
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Main Authors: | , , , , , , , , , , , , , , , , , , , , , , , , |
Format: | Journal Article |
Language: | English |
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Abstract | Consumers check few sites in online purchases. Previous research and experiments we perform demonstrate that consumers can not calculate the optimal strategy for price search. They use heuristics whose performance is better than random and less than optimal. To investigate online price search performance we survey student online textbook purchases. Students achieve good performance because they start with a good strategy and online market organization of marketplace and meta-search sites. An important factor is that algorithms at sites searched perform calculations that reduce the computational complexity of the search. |
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AbstractList | Consumers check few sites in online purchases. Previous research and experiments we perform demonstrate that consumers can not calculate the optimal strategy for price search. They use heuristics whose performance is better than random and less than optimal. To investigate online price search performance we survey student online textbook purchases. Students achieve good performance because they start with a good strategy and online market organization of marketplace and meta-search sites. An important factor is that algorithms at sites searched perform calculations that reduce the computational complexity of the search. Consumers check few sites in online purchases. Previous research and experiments we perform demonstrate that consumers can not calculate the optimal strategy for price search. They use heuristics whose performance is better than random and less than optimal. To investigate online price search performance we survey student online textbook purchases. Students achieve good performance because they start with a good strategy and online market organization of marketplace and meta-search sites. An important factor is that algorithms at sites searched perform calculations that reduce the computational complexity of the search.[PUBLICATION ABSTRACT] Consumers check few sites in online purchases. Previous research and experiments we perform demonstrate that consumers can not calculate the optimal strategy for price search. They use heuristics whose performance is better than random and less than optimal. To investigate online price search performance we survey student online textbook purchases. Students achieve good performance because they start with a good strategy and online market organization of marketplace and meta-search sites. An important factor is that algorithms at sites searched perform calculations that reduce the computational complexity of the search. Reprinted by permission of Springer |
Author | Wang, R. Sanghai, J. Berman, J. Norman, A. Hinchey, C. Frisby, J. Ke, J. Robertson, A. Schulze, C. Yan, K. Keyburn, S. Tello, A. Sussman, J. Zeinullayev, T. Kejriwal, S. Kuang, K. Tan, L. Ler, S. Schieck, J. Drake, M. Dyer, A. Powers, K. Heuer, L. Brehm, K. Govil, C. |
Author_xml | – sequence: 1 givenname: A. surname: Norman fullname: Norman, A. email: norman@eco.utexas.edu organization: Department of Economics, The University of Texas at Austin – sequence: 2 givenname: J. surname: Berman fullname: Berman, J. organization: Department of Economics, The University of Texas at Austin – sequence: 3 givenname: K. surname: Brehm fullname: Brehm, K. organization: Department of Economics, The University of Texas at Austin – sequence: 4 givenname: M. surname: Drake fullname: Drake, M. organization: Department of Economics, The University of Texas at Austin – sequence: 5 givenname: A. surname: Dyer fullname: Dyer, A. organization: Department of Economics, The University of Texas at Austin – sequence: 6 givenname: J. surname: Frisby fullname: Frisby, J. organization: Department of Economics, The University of Texas at Austin – sequence: 7 givenname: C. surname: Govil fullname: Govil, C. organization: Department of Economics, The University of Texas at Austin – sequence: 8 givenname: C. surname: Hinchey fullname: Hinchey, C. organization: Department of Economics, The University of Texas at Austin – sequence: 9 givenname: L. surname: Heuer fullname: Heuer, L. organization: Department of Economics, The University of Texas at Austin – sequence: 10 givenname: J. surname: Ke fullname: Ke, J. organization: Department of Economics, The University of Texas at Austin – sequence: 11 givenname: S. surname: Kejriwal fullname: Kejriwal, S. organization: Department of Economics, The University of Texas at Austin – sequence: 12 givenname: K. surname: Kuang fullname: Kuang, K. organization: Department of Economics, The University of Texas at Austin – sequence: 13 givenname: S. surname: Keyburn fullname: Keyburn, S. organization: Department of Economics, The University of Texas at Austin – sequence: 14 givenname: S. surname: Ler fullname: Ler, S. organization: Department of Economics, The University of Texas at Austin – sequence: 15 givenname: K. surname: Powers fullname: Powers, K. organization: Department of Economics, The University of Texas at Austin – sequence: 16 givenname: A. surname: Robertson fullname: Robertson, A. organization: Department of Economics, The University of Texas at Austin – sequence: 17 givenname: J. surname: Sanghai fullname: Sanghai, J. organization: Department of Economics, The University of Texas at Austin – sequence: 18 givenname: C. surname: Schulze fullname: Schulze, C. organization: Department of Economics, The University of Texas at Austin – sequence: 19 givenname: J. surname: Schieck fullname: Schieck, J. organization: Department of Economics, The University of Texas at Austin – sequence: 20 givenname: J. surname: Sussman fullname: Sussman, J. organization: Department of Economics, The University of Texas at Austin – sequence: 21 givenname: L. surname: Tan fullname: Tan, L. organization: Department of Economics, The University of Texas at Austin – sequence: 22 givenname: A. surname: Tello fullname: Tello, A. organization: Department of Economics, The University of Texas at Austin – sequence: 23 givenname: R. surname: Wang fullname: Wang, R. organization: Department of Economics, The University of Texas at Austin – sequence: 24 givenname: K. surname: Yan fullname: Yan, K. organization: Department of Economics, The University of Texas at Austin – sequence: 25 givenname: T. surname: Zeinullayev fullname: Zeinullayev, T. organization: Department of Economics, The University of Texas at Austin |
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References | Breusch, Pagan (CR1) 1979; 47 Sonnemans (CR9) 1998; 35 Johnson, Moe, Fader, Bellman, Lohse (CR3) 2004; 50 McMillan, Rothschild, Aumann, Hart (CR6) 1994 Norman, Shimer (CR7) 1994; 18 Halbert (CR2) 1980; 48 Kogut (CR4) 1990; 14 Norman, Ahmed, Chou, Fortson, Kurz, Lee (CR8) 2003; 50 Mahnoud, Grether (CR5) 1995; 90 J. McMillan (9276_CR6) 1994 A. Norman (9276_CR8) 2003; 50 T. S. Breusch (9276_CR1) 1979; 47 W. Halbert (9276_CR2) 1980; 48 C. Kogut (9276_CR4) 1990; 14 A. Norman (9276_CR7) 1994; 18 J. Sonnemans (9276_CR9) 1998; 35 E. Johnson (9276_CR3) 2004; 50 E.-G. Mahnoud (9276_CR5) 1995; 90 |
References_xml | – volume: 47 start-page: 1287–1294 issue: 5 year: 1979 ident: CR1 article-title: Simple test for heteroscedasticity and random coefficient variation publication-title: Econometrica doi: 10.2307/1911963 contributor: fullname: Pagan – volume: 18 start-page: 231 year: 1994 end-page: 249 ident: CR7 article-title: Risk, uncertainty and complexity publication-title: Journal of Economic Dynamics and Control doi: 10.1016/0165-1889(94)90077-9 contributor: fullname: Shimer – volume: 50 start-page: 249 year: 2003 end-page: 262 ident: CR8 article-title: An ordering experiment publication-title: Journal of Economic Behavior and Organization doi: 10.1016/S0167-2681(02)00050-1 contributor: fullname: Lee – volume: 48 start-page: 817 issue: 4 year: 1980 end-page: 838 ident: CR2 article-title: A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity publication-title: Econometrica doi: 10.2307/1912934 contributor: fullname: Halbert – volume: 14 start-page: 381 year: 1990 end-page: 392 ident: CR4 article-title: Consumer search theory and sunk costs publication-title: Journal of Economic Behavior and Organization doi: 10.1016/0167-2681(90)90065-L contributor: fullname: Kogut – start-page: 905 year: 1994 end-page: 927 ident: CR6 article-title: Search theory publication-title: Handbook of game theory with economic applications (vol. 2, Chap. 27) contributor: fullname: Hart – volume: 90 start-page: 1137 issue: 432 year: 1995 end-page: 1145 ident: CR5 article-title: Are people Bayesian? Uncovering behavioral strategies publication-title: Journal of the American Statistical Association doi: 10.2307/2291506 contributor: fullname: Grether – volume: 35 start-page: 309 year: 1998 end-page: 332 ident: CR9 article-title: Strategies of search publication-title: Journal of Economic Behavior and Organization doi: 10.1016/S0167-2681(98)00051-1 contributor: fullname: Sonnemans – volume: 50 start-page: 299 issue: 3 year: 2004 end-page: 308 ident: CR3 article-title: On the depth and dynamics of online search behavior publication-title: Management Science doi: 10.1287/mnsc.1040.0194 contributor: fullname: Lohse – volume: 90 start-page: 1137 issue: 432 year: 1995 ident: 9276_CR5 publication-title: Journal of the American Statistical Association doi: 10.2307/2291506 contributor: fullname: E.-G. Mahnoud – volume: 18 start-page: 231 year: 1994 ident: 9276_CR7 publication-title: Journal of Economic Dynamics and Control doi: 10.1016/0165-1889(94)90077-9 contributor: fullname: A. Norman – volume: 35 start-page: 309 year: 1998 ident: 9276_CR9 publication-title: Journal of Economic Behavior and Organization doi: 10.1016/S0167-2681(98)00051-1 contributor: fullname: J. Sonnemans – volume: 50 start-page: 299 issue: 3 year: 2004 ident: 9276_CR3 publication-title: Management Science doi: 10.1287/mnsc.1040.0194 contributor: fullname: E. Johnson – volume: 47 start-page: 1287–1294 issue: 5 year: 1979 ident: 9276_CR1 publication-title: Econometrica doi: 10.2307/1911963 contributor: fullname: T. S. Breusch – start-page: 905 volume-title: Handbook of game theory with economic applications (vol. 2, Chap. 27) year: 1994 ident: 9276_CR6 doi: 10.1016/S1574-0005(05)80059-1 contributor: fullname: J. McMillan – volume: 50 start-page: 249 year: 2003 ident: 9276_CR8 publication-title: Journal of Economic Behavior and Organization doi: 10.1016/S0167-2681(02)00050-1 contributor: fullname: A. Norman – volume: 14 start-page: 381 year: 1990 ident: 9276_CR4 publication-title: Journal of Economic Behavior and Organization doi: 10.1016/0167-2681(90)90065-L contributor: fullname: C. Kogut – volume: 48 start-page: 817 issue: 4 year: 1980 ident: 9276_CR2 publication-title: Econometrica doi: 10.2307/1912934 contributor: fullname: W. Halbert |
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SubjectTerms | Algorithms Behavioral/Experimental Economics Computational methods Computer Appl. in Social and Behavioral Sciences Consumer behaviour Consumers Costs Economic theory Economic Theory/Quantitative Economics/Mathematical Methods Economics Economics and Finance Electronic commerce Experiment Experimental economics Experiments Heuristic Heuristics Internet Learning Math Applications in Computer Science Online Operations Research/Decision Theory Optimization Price search Price theory Prices Shopping Students Studies Textbooks |
Title | Repeated Price Search |
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