Web Development

Consumer Search On The Internet

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Executive Summary

This paper uses consumer search data to explain search frictions in online markets, within the context of an equilibrium search model. The author uses a novel dataset of consumer online browsing and purchasing behavior, which tracks all consumer search prior to each transaction. Using observed search intensities from the online book industry, the author estimates search cost distributions that allow for asymmetric consumer sampling. Research on consumer search often assumes a symmetric sampling rule for analytical convenience despite its lack of realism.

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