The Role of Preference Discovery in Consumer Search

This research focuses on consumers who do not have well-formed preferences. As they search and evaluate potential products, they may become exposed to previously unconsidered attributes, and incorporate them into their decision criteria. We model this phenomenon by allowing the consumer to change the weights she assigns to different attributes during the course of search. In a laboratory experiment, we elicit participants’ preferences before and after evaluating several example products, and find that 53% of participants revise their decision criteria after product evaluation. We show analytically and in Monte Carlo simulation experiments that, when considering the ultimate search outcome, it may be better to recommend and inferior product, but one that helps the consumer discover his preferences. This is because product recommendations influence the consumer’s future search path, beyond just the recommended product itself: if a product exposes the consumer to a new, previously undiscovered attribute, the consumer may shift his search to a new part of the product space. Further, providing detailed product information to consumers who do not have well-formed preferences may lead them to make suboptimal decisions. For consumers who know their preferences, more detailed product information is better.