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

Author

Listed:
  • Aridor, Guy
  • Gonçalves, Duarte
  • Kluver, Daniel
  • Kong, Ruoyan
  • Konstan, Joseph

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 recommender systems.

Suggested Citation

  • Aridor, Guy & Gonçalves, Duarte & Kluver, Daniel & Kong, Ruoyan & Konstan, Joseph, 2026. "The Informational Role of Online Recommendations: Evidence from a Field Experiment," CEPR Discussion Papers 21584, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ceprdp:21584
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    Keywords

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    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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