Estimating Heterogeneous EBA and Economic Screening Rule Choice Models
Marketing Science
Structural Modeling in Marketing: Review and Assessment
Marketing Science
Buyer Search Costs and Endogenous Product Design
Marketing Science
Marketing Science
EditorialAre Consumers Rational? Experimental Evidence?
Marketing Science
Estimating Heterogeneous EBA and Economic Screening Rule Choice Models
Marketing Science
Limited Memory, Categorization, and Competition
Marketing Science
Online Demand Under Limited Consumer Search
Marketing Science
The Effect of Media Advertising on Brand Consideration and Choice
Marketing Science
Disentangling Preferences and Learning in Brand Choice Models
Marketing Science
The importance of individual characteristics on consideration sets for online auction buyers
Journal of Theoretical and Applied Electronic Commerce Research
Optimal Search for Product Information
Management Science
Marketing Science
The Advertising Mix for a Search Good
Management Science
Modeling Consumer Learning from Online Product Reviews
Marketing Science
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We offer an econometric framework that models consumer's consideration set formation as an outcome of her costly information search behavior. Because frequently purchased products are characterized by frequent price promotions of varying depths of discounts, a consumer faces significant uncertainty about the prices of the brands. The consumers engage in a fixed-sample search strategy that results in their discovering the posted prices of a subset of the available brands. This subset is referred to as the consumer's "consideration set."The proposed model is estimated using the scanner data set for liquid detergents. Our key empirical results are: (i) consumers zincur significant search costs to discover the posted prices of the brands; (ii) whereas in-store displays and feature ads do not influence consumers' quality perceptions of the brands, they significantly reduce search costs for observing the prices of the brands; (iii) per capita income of consumer's household significantly increases her search costs; and (iv) the consumers' price sensitivity is seriously underestimated if we were to assume that consumers get to know all the posted prices at zero cost. The proposed model is also estimated for the ketchup category to enable us to do cross-category comparisons of consumers' price search behavior.