Advertising, Search and Matching: Econometric Models and Applications

该奖项资助研究信息在推动消费者选择中的作用，特别关注零售银行和电力行业。传统的消费者行为经济模型通常假设消费者完全了解他们的选择。然而，对许多产品市场中持续价格分散的观察表明，在许多市场中存在显著的搜索和转换摩擦。这些摩擦可能阻碍竞争力量取得有效的结果，了解这些摩擦的相关性和程度是评估监管干预的必要性和影响的关键。为了充分理解和量化这些摩擦所起的作用，我们需要关于消费者选择的详细信息，特别是选择过程。因此，该研究项目利用了个人消费者选择的详细数据，结合了搜索/转换成本的明确模型，并考虑到有关替代方案的有限信息。美国零售银行业拥有14万亿美元的资产，大约7000家银行和8万多家银行分支机构，是零售经济和金融体系中极其重要的一部分。了解消费者如何决定他们的零售银行服务提供商，以及他们是否面临搜索和转换摩擦，对于揭示这一重要经济领域竞争和创新的驱动因素至关重要。零售银行项目使用了一个独特的数据集，其中包含消费者购物过程的整个购买漏斗的信息：(1)意识，(2)考虑，最后(3)购买。该数据集是第一个提供购买漏斗所有阶段详细数据的数据集，也是第一个研究零售银行业务的数据集，零售银行业务是一个非常重要的经济部门，很少通过现代实证工业组织的视角进行仔细研究。该数据集还补充了关于广告和产品特性的信息，以估计个人消费者一级的购物和决策的非常详细的模型。数据和模型允许研究人员评估(1)使消费者行为合理化的搜索和转换成本的大小，以及(2)广告是否在提高意识或在意识的条件下驱动选择方面主要有效。该项目还将开发类似的实证方法，研究在解除管制的零售电力市场中消费者的选择，目前该市场已在24个州运行。本研究的见解以及在其他电力市场背景下开发的经验方法的应用可以帮助市场监督和监管机构制定政策，以进一步提高这些市场的竞争力和效率。该项目将利用来自德克萨斯州居民电力选择计划的非常详细的用户水平数据。研究小组将开发一个计量经济学模型，允许基于选择摩擦的搜索和切换。该模型将用于评估这种选择摩擦是否可以解释现有供应商与进入者之间市场份额和价格的演变，以及减少搜索/转换成本的信息活动等干预措施如何影响市场结构和消费者福利。

This award funds research on the role of information in driving consumer choices, with special attention to retail banking and electricity industries.Traditional economic models of consumer behavior typically assume that consumers are fully informed about their alternatives. However, the observation of persistent price dispersion in many product markets suggests that significant search and switching frictions are present in many markets. Such frictions may impede forces of competition from achieving efficient outcomes, and understanding the relevance and magnitude of these frictions is key to assessing the necessity and impact of regulatory interventions. To fully understand and quantify the role played by these frictions, we need detailed information on consumer choices, and especially the choice-making process. Therefore, the research project utilizes detailed data on individual consumers' choices, incorporates explicit models of search/switching costs and allows for limited information about alternatives. With its 14 trillion dollars of assets, about 7,000 banks and more than 80,000 bank branches, the U.S. retail banking sector is an extremely important portion of the retail economy as well as the financial system. Understanding how consumers decide on their retail banking provider and whether they face search and switching frictions is a crucial input into unpacking the drivers of competition and innovation in this important sector of the economy. The project on retail banking utilizes a unique data set with information on the entire purchase funnel of consumers' shopping process: (1) awareness, (2) consideration, and, finally, (3) purchase. The data set is among the first to provide detailed data on all stages of the purchase funnel, as well as being the first of its kind to study retail banking, a very important sector of the economy that has not been frequently scrutinized through the lens of modern empirical industrial organization. The data set is also complemented with information on advertising and product characteristics to estimate a very detailed model of shopping and decision-making at the individual consumer level. The data and the model allows the researchers to assess (1) what the magnitude of search and switching costs are that rationalize consumer behavior, and (2) whether advertising is primarily effective in increasing awareness or driving choice conditional on awareness.The PI will also develop similar empirical methods to study consumer choices in deregulated retail electricity markets, which are in operation in 24 states. Insights from this study as well as the utilization of the empirical methods developed here in other electricity market contexts can aid market monitors and regulators to devise policies to further the competitiveness and efficiency of these markets. The project will utilize very detailed subscriber level data from Texas' residential electricity choice program. The research team will develop an econometric model that allows for search and switching based choice frictions. The model will be used to assess whether such choice frictions can explain the evolution of market shares and prices of the incumbent providers vs. entrants, and how interventions such as informational campaigns to reduce search/switching costs may affect market structure and consumer welfare.