Objective
"We propose to study the working of markets when consumers do not want to search all available choice options and when sellers recommend products based on what ""similar consumers"" have bought in the past. We argue that the current practice of on-line selling offers significant potential for selection mechanisms or limitations of what the consumer is aware of, prior to purchase. To study this issue, we propose and estimate a demand model that includes a formal model of consumer information search. This model accounts for limited product search and information effects on choice. Our proposed demand model can be estimated from a combination of browsing histories and ordinal demand data. Because these data are available for a wide cross-section of durable goods, the method we develop will likely have broader application than the strict confines of the current empirical context. The goal of developing this demand model is (i) to measure the severity of selectivity in self-motivated or seller-directed information search and (ii) to subsequently evaluate the consequences of selection for consumer welfare, and for market structure (e.g. concentration and firm competition). For instance, most product recommendation systems used in on-line selling create a feedback, between past sales and current sales, because popular products get recommended more often than unpopular ones. This polarizes product popularity beyond what it already was. Clearly such effects hold relevance when evaluating competition and entry, because in a feedback market where the big get bigger and the small get smaller, firms potentially offering new and innovative products find it difficult to enter. In sum, our study consists of (i) the development of demand models under imperfect product search, and (ii) the evaluation of the effects on consumer welfare and market structure of selective product search. We expect these aspects to be relevant in the study of (pan)-European markets."
Fields of science (EuroSciVoc)
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: https://op.europa.eu/en/web/eu-vocabularies/euroscivoc.
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: https://op.europa.eu/en/web/eu-vocabularies/euroscivoc.
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Keywords
Project’s keywords as indicated by the project coordinator. Not to be confused with the EuroSciVoc taxonomy (Fields of science)
Project’s keywords as indicated by the project coordinator. Not to be confused with the EuroSciVoc taxonomy (Fields of science)
Programme(s)
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
Topic(s)
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Call for proposal
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
FP7-PEOPLE-IRG-2008
See other projects for this call
Funding Scheme
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
Coordinator
5037 AB Tilburg
Netherlands
The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.