Abstract

In this study, we analyze consumers’ product consideration and choice at purchase time. We leverage a popular feature provided by online retailers: “What Do Customers Ultimately Buy After Viewing This Item?” We show that information contained in this feature can be used to identify consumers’ product consideration and choice at purchase time when combined with product sales data. The identification is exact in analyzing competition between two products. For analysis of three products, identification is feasible under the assumption of a discrete choice process. For analysis of more than three products, the information provides a lower bound of consumers that consider only one product at purchase time. We apply the model to 7,000 products from Amazon. The results show that more than 78 percent of consumers purchase a product without considering any other products at the purchase time.

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Consumer Product Consideration and Choice at Purchase Time at Online Retailers

In this study, we analyze consumers’ product consideration and choice at purchase time. We leverage a popular feature provided by online retailers: “What Do Customers Ultimately Buy After Viewing This Item?” We show that information contained in this feature can be used to identify consumers’ product consideration and choice at purchase time when combined with product sales data. The identification is exact in analyzing competition between two products. For analysis of three products, identification is feasible under the assumption of a discrete choice process. For analysis of more than three products, the information provides a lower bound of consumers that consider only one product at purchase time. We apply the model to 7,000 products from Amazon. The results show that more than 78 percent of consumers purchase a product without considering any other products at the purchase time.