Consumer information search and choice in retail markets

The objective of the three essays is to understand consumer decisions to visit competing grocery stores, consumers' choice of information sources and allocation of time on these information sources to search for used cars.;In the first essay, I analyze the role of marketing actions in frequently purchased categories on consumer decision to visit competing grocery stores. A random effects bivariate probit specification is employed to analyze household trips to competing stores. The model specification incorporates own store and cross store category price and feature advertising of frequently purchased items. The main finding is that consumers choose to visit both the competing stores because these stores have different "power" categories. Power categories are those where price significantly affects consumers' choice of competing store. The broader implication for retail managers is that retailers should analyze consumers' shopping basket in conjunction with monitoring the competitors' category prices.;In the second essay, I examine the impact of dealer and resale websites on one another as well as their impact on offline search in the used market using data of recent used car buyers. The used market is unique in that it is characterized by the presence of dealer websites as well as resale websites such as Craigslist, etc., where consumers can search for used cars. The interrelationship of information source use is estimated using a simultaneous equations Tobit model. The main findings are that Internet search using dealer websites is complementary to dealer visits in contrast to being substitutes as shown in prior research in the context of new cars. Search using resale websites and dealer websites have an asymmetric impact on one another.;In the third essay, I analyze the impact of online information search on product search in the used durables market. The model is estimated using data from the used car market. In the presence of uncertainty and greater perceived risk, the need for additional information could influence consumer search. Contrary to prior findings that search is limited, the results show that online information search on dealer websites and third party information websites increases search for used cars in the online as well as offline medium.