Abstract
We apply random graph modeling methodology to analyze bipartite consumer-product graphs that represent sales transactions to better understand consumer purchase behavior in e-commerce settings. Based on two real-world e-commerce data sets, we found that such graphs demonstrate topological features that deviate significantly from theoretical predictions based on standard random graph models. In particular, we observed consistently larger-than-expected average path lengths and a greater-than-expected tendency to cluster. Such deviations suggest that the consumers' product choices are not random even with the consumer and product attributes hidden. Our findings provide justification for a large family of collaborative filtering-based recommendation algorithms that make product recommendations based only on previous sales transactions. By analyzing the simulated consumer-product graphs generated by models that embed two representative recommendation algorithms, we found that these recommendation algorithm-induced graphs generally provided a better match with the real-world consumer-product graphs than purely random graphs. However, consistent deviations in topological features remained. These findings motivated the development of a new recommendation algorithm based on graph partitioning, which aims to achieve high clustering coefficients similar to those observed in the real-world e-commerce data sets. We show empirically that this algorithm significantly outperforms representative collaborative filtering algorithms in situations where the observed clustering coefficients of the consumer-product graphs are sufficiently larger than can be accounted for by these standard algorithms.
Original language | English (US) |
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Pages (from-to) | 1146-1164 |
Number of pages | 19 |
Journal | Management Science |
Volume | 53 |
Issue number | 7 |
DOIs | |
State | Published - Jul 2007 |
Keywords
- Collaborative filtering
- Consumer-purchase behavior
- Random graph theory
- Recommender systems
- Topological features
ASJC Scopus subject areas
- Strategy and Management
- Management Science and Operations Research