Template-Type: ReDIF-Paper 1.0
Title: Consumer Search, Steering and Choice Overload
Author-Name: Volker Nocke
Author-Email: volker.nocke@gmail.com
Author-Name: Patrick Rey
Author-Email: patrick.rey@tse-fr.eu
Classification-JEL: L12, L15, D42
Keywords: consumer search, sequintal search, directed search, product variety, choice overload,
multiproduct firm, platform, steering

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 the interest of 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.

Note: 
Length: 82
Creation-Date: 2023-04
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp421
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2023_421