Recommender systems and their impact on sales diversity

This paper examines the effect of recommender systems on the diversity of sales. Two anecdotal views exist about such effects. Some believe recommenders help consumers discover new products and thus increase sales diversity. Others believe recommenders only reinforce the popularity of already popular products. This paper is a first attempt to reconcile these seemingly incompatible views. We explore the question in two ways. First, modeling recommender systems analytically allows us to explore their path dependent effects. Second, turning to simulation, we increase the realism of our results by combining choice models with actual implementations of recommender systems. We arrive at three main results. One, some common recommenders lead to a net reduction in average sales diversity. Two, there exists path dependence, and in individual instances the same recommender can either increase or decrease diversity. Three, we show how basic design choices affect the outcome.