Anyone is familiar with those 'top-rated' ofers that rise to the top of their search on sites like Amazon or Expedia. Do those rankings really help those offers get sold? According to a new study, the answer is, "yes" and "no."
Raluca M. Ursu, of the Stern School of Business at New York University, conducted the research for the study, "The Power of Rankings: Quantifying the Effect of Rankings on Online Consumer Search and Purchase Decisions," which is published in the July edition of INFORMS journal Marketing Science.
The study found that products with high online rankings have a causal effect on what consumers search, but those rankings do not necessarily affect purchase decisions directly. Search intermediaries like Amazon and Expedia use rankings to influence purchases but only secondarily to their search decisions. The article emphasizes the importance of optimizing the search process, distinguishing it from assumptions that consumers are likely to make purchase decisions solely on a product's or service's high rankings.
"Constructing relevant rankings requires understanding of their causal effect on consumer choices," said Ursu. "For search intermediaries like Amazon and Expedia, measuring the causal impact of the ranking and separating it from the intrinsic quality of the product ranked, allows them to place relevant products at the top of the ranking, rather than ones that were chosen more frequently merely because of their past rank."
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