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Paper

Strategic Inattention in Product Search

MPS-Authors
/persons/resource/persons217964

Hillenbrand,  Adrian
Max Planck Institute for Research on Collective Goods, Max Planck Society;

Hippel,  Svenja
Max Planck Institute for Research on Collective Goods, Max Planck Society;

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https://www.coll.mpg.de/pdf_dat/2017_21online.pdf
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Citation

Hillenbrand, A., & Hippel, S. (2017). Strategic Inattention in Product Search.


Cite as: https://hdl.handle.net/11858/00-001M-0000-002D-FEF3-B
Abstract
Online platforms provide search tools that help consumers to get better-fitting product offers. But this technology makes consumer search behavior also easily traceable and allows for real-time price discrimination. Consumers face a trade-off: Search intensely and receive a better fit at a potentially higher price or restrict search behavior – be strategically inattentive – and receive a worse fit, but maybe a better deal. We study the resulting strategic buyer-seller
interaction theoretically as well as experimentally. Our experimental results show that it is the sellers and not the buyers who profit from these search tools.