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To Profit or to Assist? How the Inte...

Kim, Kyu Ree.

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To Profit or to Assist? How the Interplay Between Product Recommendation and Its Relative Prices Impact Consumers' Inferences and Choice.

Record Type:	Electronic resources : Monograph/item
Title/Author:	To Profit or to Assist? How the Interplay Between Product Recommendation and Its Relative Prices Impact Consumers' Inferences and Choice./
Author:	Kim, Kyu Ree.
Published:	Ann Arbor : ProQuest Dissertations & Theses, : 2024,
Description:	103 p.
Notes:	Source: Dissertations Abstracts International, Volume: 85-11, Section: B.
Contained By:	Dissertations Abstracts International85-11B.
Subject:	Home economics. -
Online resource:	https://pqdd.sinica.edu.tw/twdaoapp/servlet/advanced?query=31238674
ISBN:	9798382581439

To Profit or to Assist? How the Interplay Between Product Recommendation and Its Relative Prices Impact Consumers' Inferences and Choice.
Kim, Kyu Ree.

To Profit or to Assist? How the Interplay Between Product Recommendation and Its Relative Prices Impact Consumers' Inferences and Choice. - Ann Arbor : ProQuest Dissertations & Theses, 2024 - 103 p.

Source: Dissertations Abstracts International, Volume: 85-11, Section: B.

Thesis (Ph.D.)--Indiana University, 2024.

This article explores the interplay between a company-based product recommendation and the product's relative price. Across ten studies I find that consumers are sensitive to the relative price of the recommended option and are more likely to follow the recommendation as its relative price in the choice set decreases. I show that this occurs because consumers use the relative price of the recommended option as a cue for the company's underlying motives. Because consumers generally believe that companies profit more from selling expensive products, they also intuit that when a company recommends a lower-priced product, its motivation to do so is more to help the consumer as opposed to maximizing its own profit. Accordingly, recommending an option with lower relative prices serves as a costly signal, shaping consumers' inferences and their likelihood of following the recommendation. This effect persists across different product categories (hedonic or utilitarian), types of platforms (offline or online), and types of recommendations (human-based or algorithm-based). Consistent with the framework, I find that the effect attenuates when the recommendation comes from an independent and reliable source, when the price-profit link is weakened, and when consumers have a low innate tendency to question the company's motivation.{A0}

ISBN: 9798382581439Subjects--Topical Terms:

551902
Home economics.
Subjects--Index Terms:

Algorithm

To Profit or to Assist? How the Interplay Between Product Recommendation and Its Relative Prices Impact Consumers' Inferences and Choice.
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500 $a Advisor: Schrift, Rom Y.
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520 $a This article explores the interplay between a company-based product recommendation and the product's relative price. Across ten studies I find that consumers are sensitive to the relative price of the recommended option and are more likely to follow the recommendation as its relative price in the choice set decreases. I show that this occurs because consumers use the relative price of the recommended option as a cue for the company's underlying motives. Because consumers generally believe that companies profit more from selling expensive products, they also intuit that when a company recommends a lower-priced product, its motivation to do so is more to help the consumer as opposed to maximizing its own profit. Accordingly, recommending an option with lower relative prices serves as a costly signal, shaping consumers' inferences and their likelihood of following the recommendation. This effect persists across different product categories (hedonic or utilitarian), types of platforms (offline or online), and types of recommendations (human-based or algorithm-based). Consistent with the framework, I find that the effect attenuates when the recommendation comes from an independent and reliable source, when the price-profit link is weakened, and when consumers have a low innate tendency to question the company's motivation.{A0}
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