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Behind the clicks: Can Amazon allocate user attention as it pleases?

Author

Listed:
  • Rock, Rufus
  • Strauss, Ilan
  • O'Reilly, Tim
  • Mazzucato, Mariana

Abstract

We investigate Amazon's ability to direct user clicks to more visually prominent search results, even as quality declines with the increasing prevalence of sponsored advertising products. We analyze product results from over 2,000 Amazon Marketplace search queries to estimate how a top three most clicked product's features (price and quality) and screen placement influence a user's clicks. Our econometric results show that the position of a product search result (“position bias”), adjusted for its relative prominence on the screen, strongly shapes whether a user clicks on it. Within the top five search results, where typically four are advertisements, users exhibit decreased sensitivity to a product's relevance or pricing. This allows Amazon's sponsored ads to leverage product prominence as a mechanism for rent extraction from users and producers. Regulatory frameworks might limit platforms from exploiting consumers' satisficing behaviour online, including via moderating excessive advertising in algorithmic search results.

Suggested Citation

  • Rock, Rufus & Strauss, Ilan & O'Reilly, Tim & Mazzucato, Mariana, 2024. "Behind the clicks: Can Amazon allocate user attention as it pleases?," Information Economics and Policy, Elsevier, vol. 69(C).
    • Handle: RePEc:eee:iepoli:v:69:y:2024:i:c:s0167624524000374
    DOI: 10.1016/j.infoecopol.2024.101115
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    More about this item

    Keywords

    Attention markets; Amazon; Bounded rationality; Decision science; Digital advertising;
    All these keywords.

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • D30 - Microeconomics - - Distribution - - - General
    • D46 - Microeconomics - - Market Structure, Pricing, and Design - - - Value Theory
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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