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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.
Moe et al. (Wed,) studied this question.