In CARS We Trust: How Context-Aware Recommendations Affect Customers’ Trust and Other Business Performance Measures of Recommender Systems

60 Pages Posted: 6 Oct 2015

See all articles by Umberto Panniello

Umberto Panniello

Politecnico di Bari

Michele Gorgoglione

Politecnico di Bari

Alexander Tuzhilin

New York University (NYU) - Leonard N. Stern School of Business; New York University (NYU) - Department of Information, Operations, and Management Sciences

Date Written: October 2015

Abstract

Most of the work on Context-Aware Recommender Systems (CARSes) has focused on demonstrating that the contextual information leads to more accurate recommendations and on developing efficient recommendation algorithms utilizing this additional contextual information. Little work has been done, however, on studying how much the contextual information affects purchasing behavior and trust of customers. In this paper, we study how including context in recommendations affects customers’ trust, sales and other crucial business-related performance measures. To do this, we performed a live controlled experiment with real customers of a commercial European online publisher. We delivered content-based recommendations and context-aware recommendations to two groups of customers and to a control group. We measured the recommendations’ accuracy and diversification, how much customers spent purchasing products during the experiment, quantity and price of their purchases and the customers’ level of trust. We aim at demonstrating that accuracy and diversification have only limited direct effect on customers’ purchasing behavior, but they affect trust which drives the customer purchasing behavior. We also want to prove that CARSes can increase both recommendations’ accuracy and diversification compared to other recommendation engines. This means that including contextual information in recommendations not only increases accuracy, as was demonstrated in previous studies, but it is crucial for improving trust which, in turn, can affect other business-related performance measures, such as company’s sales.

Suggested Citation

Panniello, Umberto and Gorgoglione, Michele and Tuzhilin, Alexander, In CARS We Trust: How Context-Aware Recommendations Affect Customers’ Trust and Other Business Performance Measures of Recommender Systems (October 2015). NYU Working Paper No. 2451/34278, Available at SSRN: https://ssrn.com/abstract=2669979

Umberto Panniello (Contact Author)

Politecnico di Bari ( email )

Via Edoardo Orabona
Bari, 70123
Italy

Michele Gorgoglione

Politecnico di Bari ( email )

Via Edoardo Orabona
Bari, 70123
Italy

Alexander Tuzhilin

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

New York University (NYU) - Department of Information, Operations, and Management Sciences

44 West Fourth Street
New York, NY 10012
United States

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