Consumer Decision-Making at an Internet Shopbot

By Michael D. Smith, Erik Brynjolfsson. 2001

617 citations recorded by the source corpus.

Internet shopbots compare prices and service levels at competing retailers, creating a laboratory for analyzing consumer choice. We analyze 20,268 shopbot consumers who select various books from 33 retailers over 69 days for a total of 1,512,856 observed offers. Although each retailer offers a homogeneous product, we find that brand is an important determinant of consumer choice. Consumers use brand as a proxy for retailer credibility in non-contractible aspects of the product and service bundle, such as shipping reliability. Our results also suggest that consumers are sensitive to how total price is allocated between the item price, shipping price, and tax.

Subfields: Marketing, Sociology and Political Science, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/9e8c1365f7b27c0633719d9780a7a96cbd3956e3

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Citations in the corpus

Physical Distribution Service Quality In Internet Retailing: Service Pricing, Transaction Attributes, and Firm Attributes (2004, background): “As argued in prior e-service and information-economics work, online sellers are likely to participate in the market on the basis of both PDS price and quality, and consumers may reasonably pay a premium for PDS quality they cannot observe in advance (Dana, 2001; Kirmani and Rao, 2000; Smith and Bryn”
Assessing Sale Strategies in Online Markets Using Matched Listings (2015, background): “Yet studies by Bailey (1998); Smith and Brynjolfsson (2001); Baye, Morgan, and Scholten (2004); and Ellison and Ellison (2009), all report substantial dispersion in posted prices, even on structured price comparison websites.7 Recent work by Malmendier and Lee (2011) also provides a striking…”
Value‐driven Internet shopping: The mental accounting theory perspective (2010, background): “Moreover, recent studies (e.g., Smith & Brynjolfsson, 2001) report that online sales do not necessarily increase when prices are reduced because even price-sensitive customers do not always purchase from vendors offering the lowest prices.”
A Nonparametric Approach to Modeling Choice with Limited Data (2009, methodology): “Our model of the customer is thus general.2”
Measuring Prices and Price Competition Online: Amazon and Barnes and Noble (2002, positive): “Smith and Brynjolfsson (2001) examine customer behavior at a book price comparison site but find that brand still matters a lot for consumers' click through probabilities. sites.”
The impact of shopbots on electronic markets (2002, background): “In the online book market, Smith and Brynjolfsson (2001) analyze customer choice data for nearly 40,000 searches for books conducted at Dealtime.com in late 1999.”