Demand effects of consumers' stated and revealed preferences

Arbeitspapier

Knowledge of how consumers react to different quality signals is fundamental for understanding how markets work. We study the online market- place for Android apps where we compare the causal effects on demand from two quality related signals; other consumers' stated and revealed preferences toward an app. Our main result is that consumers are much more responsive to other consumers' revealed preferences, compared to others' stated preferences. A 10 percentile increase in displayed average rating only increases downloads by about 3 percent, while a 10 percentile increase in displayed number of downloads increases downloads by about 20 percent.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2013:6

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions ; Single Equation Models: Single Variables: Instrumental Variables (IV) Estimation ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness ; Marketing
• Subject: peer effects ; observational learning ; stated preferences ; revealed preferences ; eWOM ; Google play ; Android apps ; regression discontinuity design ; instrumental variable analysis

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Engström, Per ; Forsell, Eskil
• Event: Veröffentlichung
• (who): Uppsala University, Department of Economics
• (where): Uppsala
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/82550
• URN: urn:nbn:se:uu:diva-198662