Tuesday, February 15, 2011
Posted by D. Daniel Sokol
Anindya Ghose, New York University - Leonard N. Stern School of Business, Avi Goldfarb, University of Toronto - Joseph L. Rotman School of Management, and Sang Pil Han, New York University (NYU) - Leonard N. Stern School of Business address How is the Mobile Internet Different? Search Costs and Local Activities.
ABSTRACT: We explore how Internet browsing behavior varies between mobile devices and personal computers. Smaller screen sizes on mobile devices increase the cost to the user of reading information. In addition, a wider range of offline locations for mobile Internet usage suggests that geographically local activities can be particularly important. Using data on user behavior at a microblogging service (similar to Twitter), we exploit randomization in the ranking mechanism for the microblog posting feeds as a natural experiment to identify user search costs. We estimate a hierarchical Bayesian framework to better control for heterogeneity and show: (1) Search costs are higher on mobile devices: While links that appear at the top of the screen are always more likely to be clicked, this effect is much stronger on mobile devices; (2) The benefit of searching for geographically close matches is higher on mobile devices: Stores located in close proximity to a user are much more likely to be clicked on mobile devices. In this way, the mobile Internet is somewhat less “Internet-like”: search costs are higher and distance matters more. We speculate on how these changes may affect the future direction of Internet commerce.