Business Intelligence

How Does Popularity Information Affect Choices? Theory and A Field Experiment

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Executive Summary

Popularity information is usually thought to reinforce existing sales trends by encouraging customers to flock to mainstream products. A theoretical model was developed which predicts the opposite: popularity information may benefit niche products disproportionately, because the same level of popularity implies higher quality for a niche product than for a mainstream product. Author examined this prediction empirically using field experiment data from a web site that lists wedding service vendors. It's found that popular niche vendors receive more visits than popular mainstream vendors, across several definitions of niche.

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