Personalization and Choice Behavior

Abstract

Online merchants use personalization technologies to gain knowledge of an individual customer and then generate preference-matched web content for the customer. Among the various types of personalization technologies, this research focuses on personalization engines that generate preference-matched content based on a customer's prior transactions. Extant research in this area has focused on how to maximize knowledge mined from transaction logs to generate content that is highly similar to the customer's past revealed preferences. However, it remains an empirical question as to whether the content closely matched with previous transactions is most likely to influence choice behavior. In this study, we postulate that the content closely matched with previous transactions may not be the most influential in biasing a customer. In the consideration and choice process, an individual's personality traits play a pivotal role in moderating the effect of personalized content. Drawing on research in marketing, we examine three key personality traits: need for cognition; variety seeking, and need for uniqueness; and explore their effects on choice behavior in the context of transaction-driven personalization. Research hypotheses are tested with over 2,000 pre-selected subjects in an online experiment based on a ringtone download website. We find that individual personality traits moderate content consideration and choice. Theoretical and practical implications of the findings are discussed.