Consumer Decision-making at an Internet Shopbot: Brand Still Matters

Authors: Smith, Michael D.¹; Brynjolfsson, Erik²

Source: Journal of Industrial Economics, Volume 49, Number 4, December 2001 , pp. 541-558(18)

Buy & download fulltext article:

Price: $48.00 plus tax (Refund Policy)

Abstract:

Internet shopbots compare prices and service levels at competing retailers, creating a laboratory for analysing consumer choice. We analyse 20,268 shopbot consumers who select various books from 33 retailers over 69 days. Although each retailer offers a homogeneous product, we find that brand is an important determinant of consumer choice. The three most heavily branded retailers hold a $1.72 price advantage over more generic retailers in head-to-head price comparisons. In particular, we find that consumers use brand as a proxy for retailer credibility in non-contractible aspects of the product and service bundle, such as shipping reliability.

Document Type: Original article

DOI: http://dx.doi.org/10.1111/1467-6451.00162

Affiliations: 1: H. John Heinz III School of Public Policy and Management, Carnegie Mellon University, Pittsburgh, PA, 15213, USA, 2: Sloan School of Management, Massachusetts Institute of Technology, Cambridge, MA, 02142-1347, USA

Publication date: 2001-12-01