The Impact of Consumer Search Cost on Assortment Planning and Pricing

2014 ◽  
Author(s):  
Ozge Sahin ◽  
Ruxian Wang
Keyword(s):  
Consumer Search ◽  
Assortment Planning ◽  
Search Cost ◽  
The Impact

The Impact of Consumer Search Cost on Assortment Planning and Pricing

2018 ◽  
Vol 64 (8) ◽  
pp. 3649-3666 ◽  
Author(s):  
Ruxian Wang ◽  
Ozge Sahin
Keyword(s):  
Consumer Search ◽  
Assortment Planning ◽  
Search Cost ◽  
The Impact

scholarly journals Exploring the Impact of Early Decisions in Variable Ordering for Constraint Satisfaction Problems

2018 ◽  
Vol 2018 ◽  
pp. 1-14
Author(s):  
José Carlos Ortiz-Bayliss ◽  
Ivan Amaya ◽  
Santiago Enrique Conant-Pablos ◽  
Hugo Terashima-Marín
Keyword(s):  
Constraint Satisfaction ◽  
Constraint Satisfaction Problems ◽  
Search Cost ◽  
High Quality ◽  
Simple Method ◽  
Variable Ordering ◽  
It Performance ◽  
The Cost ◽  
The Impact ◽  
Variable Ordering Heuristics

When solving constraint satisfaction problems (CSPs), it is a common practice to rely on heuristics to decide which variable should be instantiated at each stage of the search. But, this ordering influences the search cost. Even so, and to the best of our knowledge, no earlier work has dealt with how first variable orderings affect the overall cost. In this paper, we explore the cost of finding high-quality orderings of variables within constraint satisfaction problems. We also study differences among the orderings produced by some commonly used heuristics and the way bad first decisions affect the search cost. One of the most important findings of this work confirms the paramount importance of first decisions. Another one is the evidence that many of the existing variable ordering heuristics fail to appropriately select the first variable to instantiate. Another one is the evidence that many of the existing variable ordering heuristics fail to appropriately select the first variable to instantiate. We propose a simple method to improve early decisions of heuristics. By using it, performance of heuristics increases.

Consumer Search and Filtering on Online Retail Platforms

2020 ◽  
Vol 57 (5) ◽  
pp. 900-916
Author(s):  
Baojun Jiang ◽  
Tianxin Zou
Keyword(s):  
Consumer Search ◽  
Third Party ◽  
Demand Elasticity ◽  
Search Cost ◽  
Online Retail ◽  
The Third ◽  
Retail Prices ◽  
The Third Party

This article examines how the consumer’s search cost and filtering on a retail platform affect the platform, the third-party sellers, and the consumers. The authors show that, given the platform’s percentage referral fee, a lower search cost can either increase or decrease the platform’s profit. By contrast, if the platform optimally adjusts its referral fee, a lower search cost will increase the platform’s profit. As the consumer’s search cost decreases, if the platform’s demand elasticity increases significantly, the platform should reduce its fee, potentially resulting in an all-win outcome for the platform, the sellers, and the consumers; otherwise, a lower search cost will increase the platform’s optimal fee percentage, potentially leading to higher equilibrium retail prices. Furthermore, the availability of filtering on the platform will in expectation induce consumers to search fewer products but buy products with higher match values, and filtering can either increase or decrease equilibrium retail prices. When filtering reveals only a small amount of the products’ match-value variations, it will benefit the platform, the sellers, and the consumers. This article shows that the effects of filtering and those of a decrease in search cost are qualitatively different.

The Impact of Store-Price Signals on Consumer Search and Store Evaluation

2011 ◽  
Vol 87 (2) ◽  
pp. 127-141 ◽  
Author(s):  
Hillbun (Dixon) Ho ◽  
Shankar Ganesan ◽  
Harmen Oppewal
Keyword(s):  
Consumer Search ◽  
Price Signals ◽  
The Impact

Impact of competition on fund disclosures and consumer search costs

2019 ◽  
Vol 18 (2) ◽  
pp. 198-220
Author(s):  
Sitikantha Parida
Keyword(s):  
Mutual Funds ◽  
Mutual Fund ◽  
Market Competition ◽  
Search Costs ◽  
Consumer Search ◽  
Relative Performance ◽  
Policy Implications ◽  
Content Type ◽  
The Impact ◽  
Illiquid Assets

Purpose The purpose of this paper is to investigate the impact of competition in financial markets on the frequency of portfolio disclosures by mutual funds and its implications for consumer search costs. Design/methodology/approach The empirical analysis merges the Center for Research in Security Prices (CRSP) survivorship bias-free mutual fund database, the Thompson Financial CDA/ Spectrum holdings database and the CRSP stock price data. The sample covers the time period between 1993 and 2010 and OLS and logistic regressions are used to investigate the impact of competition on fund disclosures. Findings This paper finds that mutual fund disclosures decrease with market competition and this effect is amplified for funds holding illiquid assets. These results provide empirical support for the findings of Carlin et al. (2102). Mutual funds use portfolio disclosures as a marketing tool to attract investments in a tournament-like market, where superior relative performance and greater visibility are rewarded with convex payoffs. With competition, the likelihood of receiving new investments decreases for each fund and funds respond by reducing costly voluntary disclosures. The disclosure costs are higher for funds holding illiquid assets, and hence, the effect is stronger for them. Originality/value This paper has important policy implications for disclosures in a market where relative performance matters. The traditional view is that competition induces voluntary disclosure because entities would like to differentiate themselves from competitors, and hence, competition should increase market transparency. However, this paper sheds light on the negative consequence of competition in a tournament-like mutual fund market.

scholarly journals Evidence on search costs under hyperinflation in Brazil: The effect of Plano Real

2020 ◽  
Vol 40 (1) ◽  
pp. 75
Author(s):  
Julia P. Araujo ◽  
Mauro Rodrigues
Keyword(s):  
Consumer Price Index ◽  
Search Costs ◽  
Price Setting ◽  
Search Frictions ◽  
Search Cost ◽  
Order Stochastic Dominance ◽  
Cost Distribution ◽  
The Impact ◽  
The City ◽  
Price Quotes

<p>Plano Real put an end to hyperinflation in 1994 and significantly altered price-setting behavior in Brazil. This paper investigates the impact of Plano Real on search frictions. We estimate a nonsequential search model for homogeneous goods to structurally retrieve consumers' search costs. The dataset comprises 11,673 store-level price quotes collected from 1993 to 1995 by FIPE to calculate the Consumer Price Index (CPI) in the city of São Paulo. The strategy consists of using Plano Real as a structural breakpoint in the data. We estimate the model splitting the data into before (Jan-93 to Jun-94) and after (Aug-94 to Dec-95) the plan, and we find evidence on first-order stochastic dominance of the search-cost distribution of the former into the latter; that is, search costs are higher during hyperinflation. The majority of consumers search only once or twice before buying an item, but this share is marginally higher during hyperinflation (84% vs 79%). In addition, after Plano Real, a larger share of consumers are willing to quote prices in all stores before committing to a purchase. We also document evidence of the effect of the plan on shrinking price-cost margins. When searching is less costly, stores lose market power.</p>

The Double Diamond Paradox

2017 ◽  
Vol 9 (3) ◽  
pp. 63-99 ◽  
Author(s):  
Daniel Garcia ◽  
Jun Honda ◽  
Maarten Janssen
Keyword(s):  
Social Welfare ◽  
Alternative Explanation ◽  
Price Dispersion ◽  
Bimodal Distribution ◽  
Consumer Search ◽  
Search Cost ◽  
Monopoly Price ◽  
Pass Through ◽  
Double Diamond ◽  
Regular Price

We study vertical relations in markets with consumer and retailer search. We obtain three important new results. First, we provide a novel explanation for price dispersion that does not depend on some form of heterogeneity among consumers. Price dispersion takes on the form of a bimodal distribution. Second, under competitive conditions (many retailers or small consumer search cost), social welfare is significantly smaller than in the double marginalization outcome. Manufacturers' regular price is significantly above the monopoly price, squeezing retailers' markups and providing an alternative explanation for incomplete cost pass-through. Third, firms' prices are decreasing in consumer search cost. (JEL D11, D21, D43, D83, L13, L60, L81)

The impact of online referral on brand market strategies with consumer search and spillover effect

2018 ◽  
Vol 24 (4) ◽  
pp. 2551-2565 ◽  
Author(s):  
Chi Zhou ◽  
Nana Ma ◽  
Xin Cui ◽  
Zhibing Liu
Keyword(s):  
Spillover Effect ◽  
Consumer Search ◽  
The Impact ◽  
Market Strategies
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