Attention and saliency on the internet: Evidence from an online recommendation system

Christian Helmers, Pramila Krishnan and Manasa Patnam

Journal of Economic Behavior & Organization, 2019, vol. 161, issue C, 216-242

Abstract: Using high-frequency product-level data from an online retail store, we examine whether consumer choices on the internet are consistent with models of limited attention. We test whether consumers are more likely to buy products that receive a saliency shock when they are recommended by new products. We find a sharp and robust 6% increase in the aggregate sales of existing products after they are recommended by a new product. We also establish that the spillover effects of saliency on products further away in the recommendation network are small, suggesting that returns to search via the recommendation network diminish swiftly. Using a structural model we find that saliency has large effects on consumer consideration but a smaller effect on their subsequent choice, conditional on consideration. Counterfactuals suggest that limited attention disproportionately harms top-selling products but recommendation systems can alleviate these search frictions.

Keywords: Limited attention; Advertising; Online markets (search for similar items in EconPapers)
JEL-codes: D22 M30 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Attention and Saliency on the Internet: Evidence from an online recommendation system (2015)
Working Paper: Attention and Saliency on the Internet: Evidence from an Online Recommendation System (2015)
Working Paper: Attention and Saliency on the Internet: Evidence from an Online Recommendation System (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:161:y:2019:i:c:p:216-242

DOI: 10.1016/j.jebo.2019.04.010

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