Consumer Decision-making at an Internet Shopbot: Brand Still Matters
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.
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Document Type: Original Article
H. John Heinz III School of Public Policy and Management, Carnegie Mellon University, Pittsburgh, PA, 15213, USA,
Sloan School of Management, Massachusetts Institute of Technology, Cambridge, MA, 02142-1347, USA
Publication date: December 1, 2001