How Recommendation Affects Customer Search: A Field Experiment

Abstract

The findings of this study have important implications for digital platform designers, managers, and regulators. First, the large-scale field experiment provides valuable insights into the relationship between product recommendation and consumer search under different scenarios. It highlights the importance of understanding consumer demand states and previous interests. Platforms can use these findings to customize product recommendations at an individual level and foster channel complementarity between recommendation and search. Second, the study emphasizes the need to consider channel spillovers. Optimizing recommender systems without considering the impact of channel interactions with search engines may lead to suboptimal results. Platforms should aim for a more coordinated integration of recommendation and search channels, as our conceptual framework illustrates how customers in different demand states can be influenced and served by both systems. Third, the findings offer insights into the potential impact of data regulations on e-commerce platforms. The study demonstrates that data regulations have a greater impact on the recommendation channel compared with the search channel. Platforms should find a balance between recommendation and search when facing stringent data regulations. They may strategically focus on the search channel to gather revealed customer interests, leading to a deeper integration of both channels.