Validation of the information processing theory of consumer choice: evidence from travel search engine clickstream data

Abstract

Purpose This paper aims to demonstrate how consumer clickstream data from a leading hotel search engine can be used to validate two hidden information processing stages – first eliminate alternatives, then choose – proposed by the revered information processing theory of consumer choice. Design/methodology/approach This study models the two hidden information processing stages as hidden states in a hidden Markov model, estimated on consumer search behavior, product attributes and diversity of alternatives in the consideration set. Findings First, the stage of information processing can be statistically characterized in terms of consumer search covariates, including trip characteristics, use of search tools and the diversity of the consideration set, operationalized in terms of: number of brands, dispersion of price and dispersion of quality. Second, users are more sensitive to price and quality in the first rather than the second stage, which is closer to purchase. Research limitations/implications The results suggest practical implications for how search engine managers can target consumers with appropriate marketing-mix actions, based on which information processing stage consumers might be in. Originality/value Most previous studies on validating the information processing theory of consumer choice have used laboratory experiments, subjects and information display boards comprising hypothetical product alternatives and attributes. Only a few studies use observational data. In contrast, this study uniquely uses point-of-purchase clickstream data on actual visitors at a leading hotel search engine and tests the theory based on real products, attributes and diversity of the consideration set.