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Inorganic Search Results and Information Cascades

Amazon Changed Search Algorithm in Ways That Boost Its Own Products

This article talks about how Amazon allegedly implements an algorithm that favors its own products over those of third-party sellers. The key to this problem is that Amazon is both operating the platform and selling goods. Amazon was also accused of implementing an algorithm that is skewed toward profitability, but then their representatives assert that the search engine prioritizes relevance, including prioritizing those with more and better reviews (which is similar to prioritizing pages with a higher authority score) and even allocating a greater number of sponsored slots than before.

This brings to question how mathematical models of search algorithms fare in a world where efficiency is not the only desirable outcome and corporate entities can play multiple roles simultaneously. The sponsored slots may work in a similar mechanism to the VCG algorithm we studied in class, but when one of the advertisers–Amazon–wants a slot on their own site, they essentially incur a cost of 0 and however large of a payoff they want without raising suspicion. Even if Amazon products are displayed organically in the search results, since they own the platform, there are ways to boost the organic ranking of their products, such as by filtering reviews or approving fewer reviews for non-Amazon products. This could even lead to information cascades: when people see that the Amazon products show up earlier in the search and that they receive more positive reviews, they become more likely to buy these products since so many did before them.

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