How Does Popularity Information Affect Choices? A Field Experiment

Authors:
Catherine Tucker;Juanjuan Zhang
Affiliations:
MIT Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02142;MIT Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02142
Venue:
Management Science
Year:
2011

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Abstract

Popularity information is usually thought to reinforce existing sales trends by encouraging customers to flock to mainstream products with broad appeal. We suggest a countervailing market force: popularity information may benefit niche products with narrow appeal disproportionately, because the same level of popularity implies higher quality for narrow-appeal products than for broad-appeal products. We examine this hypothesis empirically using field experiment data from a website that lists wedding service vendors. Our findings are consistent with this hypothesis: narrow-appeal vendors receive more visits than equally popular broad-appeal vendors after the introduction of popularity information. This paper was accepted by Pradeep Chintagunta, marketing.