The Informational Role of Online Recommendations: Evidence from a Field Experiment

Guy Aridor, Duarte Gonçalves, Daniel Kluver, Ruoyan Kong and Joseph Konstan

No 10129, CESifo Working Paper Series from CESifo

Abstract: We conduct a field experiment on a movie-recommendation platform to investigate whether and how online recommendations influence consumption choices. Using a within-subjects design, our experiment measures the causal effect of recommendations on consumption and decomposes the relative importance of two economic mechanisms: expanding consumers’ consideration sets and providing information about their idiosyncratic match value. We find that the informational component exerts a stronger influence – recommendations shape consumer beliefs, which in turn drive consumption, particularly among less experienced consumers. Our findings and experimental design provide valuable insights for the economic evaluation and optimisation of online recommendation systems.

Keywords: recommendations; recommender systems; information acquisition; field experiment; platforms. (search for similar items in EconPapers)
JEL-codes: D12 D47 D83 L15 M37 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-exp, nep-mkt and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: The Informational Role of Online Recommendations: Evidence from a Field Experiment (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_10129

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