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Consumer Search, Steering, and Choice Overload
Resource type
Authors/contributors
- Nocke, Volker (Author)
- Rey, Patrick (Author)
Title
Consumer Search, Steering, and Choice Overload
Abstract
We develop a model of within-firm sequential, directed search and study a firm?s ability and incentive to steer consumers. We find that the firm often benefits from adopting a noisy positioning strategy, which limits the information available to consumers. This induces consumers to keep searching but discourages some of them from visiting the firm. This occurs even though the firm and the consumers have in common an interest in maximizing the probability of trade. Because of such noisy positioning, an increase in the size of the product line further discourages consumers from visiting the firm?consistent with choice overload.
Publication
Journal of Political Economy
Volume
132
Issue
5
Pages
1684-1739
Date
2024-05-01
DOI
ISSN
0022-3808
Accessed
2024-06-27
Extra
Publisher: The University of Chicago Press
Citation
Nocke, V., & Rey, P. (2024). Consumer Search, Steering, and Choice Overload. Journal of Political Economy, 132, 1684–1739.
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