The Influence of the Herfindahl-Hirschman Index and Product Complexity on Search Behaviour: A Cross-sector Study of the U.S., Germany and U.K.

Holland, C. P., Jacobs, J. A.

Abstract
Consumer search is analysed in a cross-sector study of six markets in the US, Germany and UK using online panel data. Two constructs are used to measure the search process: the consideration set and use of price comparison engines. The consideration sets range from 2.3 to 3.1 in the US, from 2.3 to 2.6 in Germany and from 2.6 to 3.2 in the UK, regardless of the use of price comparison engines. These results are significantly smaller than expected compared to pre-Internet studies and theory predictions. However, they are consistent with the few published results that used online panel data. It is shown that the consideration set is a function of the Herfindahl-Hirschman Index. The use of price comparison engines is inversely related to product complexity. The theoretical and managerial implications of the research results are explained and the potential of using online panel data for future research into online consumer behaviour and strategy is outlined.

Keywords
consumer search behaviour; consideration set; online panel data; market structure; international and multi-sector research; Herfindahl-Hirschman Index; clickstream analysis