Charles Hodgson, Assistant Professor of Economics, Yale University

We develop and estimate a model of consumer search with spatial learning and path dependence. Consumers make inferences from previously searched objects to unsearched objects that are nearby in attribute space. The estimated model rationalises patterns in data on online consumer search paths: search tends to converge to the chosen product in attribute space, and consumers take larger steps away from rarely purchased products. Eliminating spatial learning reduces consumer welfare by 12%: cross-product inferences allow consumers to locate better products in a shorter time. Spatial learning has important implications for the power of search intermediaries. We use simulations to show that consumer welfare can be significantly reduced by unrepresentative product recommendations. We characterise consumer-optimal product recommendations as those that are most informative about other products.

Speaker bio

Charles Hodgson is Assistant Professor of Economics at Yale University. He holds a PhD from Stanford University. Hodgson’s research interests are in industrial organisation and applied microeconomics. His current research focuses on search, learning, and matching problems faced by economic agents in settings including natural resource exploration, consumer search, and organ allocation.

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Meeting ID: 846 8067 8991
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Via Zoom
(Online)

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Date: 23 November 2022
Start Time: 16:00
End Time: 17:00

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Open to: Members of the University of Cambridge

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(Online)

Event timings

Date: 23 November 2022
Start Time: 16:00
End Time: 17:00