The Probit Choice Model Under Sequential Search with an Application to Online Retailing

• 成果类型: Article
• 署名作者: Kim, Jun B.; Albuquerque, Paulo; Bronnenberg, Bart J.
• 署名单位: Hong Kong University of Science & Technology; INSEAD Business School; Tilburg University; Centre for Economic Policy Research - UK
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2016.2545
• 发表日期: 2017
• 页码: 3911-3929
• 关键词: optimal sequential search; discrete choice; consumer heterogeneity; aggregate demand models; Information economics; market structure

摘要

We develop a probit choice model under optimal sequential search and apply it to the study of aggregate demand of consumer durable goods. In our joint model of search and choice, we derive an expression for the probability of choice that obeys the full set of restrictions imposed by optimal sequential search. Estimation of our partially analytic model avoids the computation of high-dimensional integrations in the evaluation of choice probabilities, which is of particular benefit when search sets are large. We demonstrate the advantages of our approach in data experiments and apply the model to aggregate search and choice data from the camcorder product category at Amazon.com. We show that the joint use of search and choice data provides better performance in terms of inferences and predictions than using search data alone and leads to realistic estimates of consumer substitution patterns.