Customer Decision-Making at an Internet Shopbot:
Brand Still Matters

Published in Journal of Industrial Economics,
December 2001, Vol. 49, Issue 4, pp. 541-558.

Michael Smith

Carnegie Mellon University
4800 Forbes Avenue
Pittsburgh, PA 15213

Erik Brynjolfsson

MIT Sloan School of Management
50 Memorial Drive
Cambridge, MA 02139


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Internet shopbots compare prices and service levels at competing retailers, creating a laboratory for analyzing consumer choice. We analyze 20,268 shopbot consumers who select various books from 33 retailers over 69 days. Although each retailer offers a homogeneous product, we find that brand is an important determinant of consumer choice. The three most heavily branded retailers hold a $1.72 price advantage over more generic retailers in head-to-head price comparisons. In particular, we find that consumers use brand as a proxy for retailer credibility in non-contractible aspects of the product and service bundle, such as shipping reliability.