Window Shopping

Abstract

"Window shopping" and "showrooming" refer to the activity in which potential buyers visit a brick-and-mortar store to examine a product but end up either not buying it or buying the product from an online retailer. This paper analyzes potential buyers who differ in their preference for after-sale service that is not offered by online retailers. Making a trip to the brick-and-mortar store is costly; however, it has the advantage of mitigating the uncertainty as to whether the product will suit the buyer's needs. Window shopping enhances the walk-in store's profit and lowers aggregate consumer surplus and total welfare.