How Do Recommender Systems Lead to Consumer Purchases? A Causal Mediation Analysis of a Field Experiment

Xitong Li (), Jörn Grahl () and Oliver Hinz
Additional contact information
Xitong Li: Department of Information Systems and Operations Management, HEC Paris, 78351 Jouy-en-Josas, France
Jörn Grahl: Digital Transformation and Analytics, Faculty of Management, Economics, and Social Sciences, University of Cologne, 50923 Cologne, Germany

Information Systems Research, 2022, vol. 33, issue 2, 620-637

Abstract: How do recommender systems induce consumers to buy? Extant research neglects to examine the causal paths through which the use of recommender systems leads to consumer purchases. In this study, we conduct a randomized controlled field experiment on the website of an online book retailer and explore the causal paths by employing the recently developed causal mediation approach. Not surprisingly, the results show that the presence of personalized recommendations increases consumers’ propensity to buy by 12.4% and basket value by 1.7%. More importantly, we find that these positive economic effects are largely mediated through affecting the consumers’ consideration sets. Specifically, the presence of personalized recommendations increases both the size of consumers’ consideration sets ( breadth ) and how intensively they are involved with each alternative in consideration ( depth ). It is the two changes that go on to increase consumers’ propensity to buy and basket value. Furthermore, we find that the proportion of the total effects mediated through the breadth of consideration set is much larger and more significant than that mediated through the depth.

Keywords: recommender systems; consideration set; consumer purchases; field experiment; causal mediation analysis (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (8)

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Working Paper: How Do Recommender Systems Lead to Consumer Purchases? A Causal Mediation Analysis of a Field Experiment (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:inm:orisre:v:33:y:2022:i:2:p:620-637

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