The Effect of Recommendation Systems on Sales Concentration
Date Issued
2009
Date
2009
Author(s)
Chiang, Tzung-En
Abstract
In recent years, it has seen an extraordinary increase in the number of products available on the Internet. Thus, it has become increasingly important to help consumers locate desirable products from Internet. Recommenders are useful tools to solve this problem. However, there are two different views about recommenders. Some researchers believe that with the help of recommendation systems, the concentration of sales on a small number of hits will decrease. On the contrary, contradicting views that believe recommendation systems make popular products become more popular and vice-versa for unpopular ones exist. Our results indicate change of sales concentration is depended on which recommendation strategies we adopt. Sales concentration will increase when recommenders incline to recommend popular products. On the contrary, sales concentration will decrease when recommenders promote products which fit consumers’ awareness behaviors. We also add consumer’s awareness behaviors and acceptance rate into discuss. We find these two factors only change the magnitude of the effects of recommenders to sales concentration but not the direction. According to these results, we can combine awareness behaviors, recommendation strategies and acceptance rate when we predict change of sales concentration.
Subjects
Business
economics
electronic commerce
recommender systems
collaborative filtering
winner-take-all
simulation
long tail
concentration
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