Abstract
The objective of this article is to examine the impact of a new competitive entry on online consumer search behavior. The authors use store visitation as a measure of online search and decompose a shopper's tendency to search a given Web site into a baseline search preference for that site and an inertial effect of visiting that site. They find that inertia is an important driver in search behavior and is easily disrupted by a new competitive entry. This is a new and significant finding that contributes to the competitive entry literature. The authors develop a Bayesian model of search that separates the role of baseline search preference and inertia on store visitation and captures the effect of a new competitive entry. They apply this model to Internet clickstream data for the online bookstore market, in which they focus on the entry of Borders.com in 1998.
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