Researchers devise new framework for retailers to improve the positioning of products

aisle-backpack-buyer-2292919Researchers have created a new framework for retailers to improve the positioning of their products to consumers.

According to a new study by researchers at ESMT Berlin and Melbourne Business School, consumers usually lack complete information about the choices they face and end up spending time and effort acquiring the information they need.

“Because consumers trade off the value of better information against its cost and make their final product choices based on imperfect information,” explains the abstract of the study, published in the journal Operations Research.

Consumers ultimately end up making poor choices because of a lack of information. As a result, superior products lose out on sales.

“Consumer choice behaviour is a crucial factor in many practical operational problems,” said ESMT Berlin‘s Tamer Boyaci.

“For example, for an online firm like or, when consumers search for a particular accommodation there is usually a large number of potential hits, which they do not have the time to fully assess. Options displayed on the first page typically receive the most attention, while, from the buyer’s perspective, choices listed on the following pages require additional effort to evaluate.”

Boyaci points out, “Facing an abundance of product choices, and with only limited time and attention to evaluate, consumers have to quickly come to grips with how much and what type of information to acquire and pay attention to, and what to ignore. They then make purchasing decisions based on partial information, therefore it’s quite possible that consumers routinely make the wrong choices.”

The researchers introduced an information cost function that distinguishes between direct and implied information and proceeded to analytically characterize the optimal choice probabilities. According to the abstract of the study, “We find that nonuniform information costs can have a strong impact on product choice, which gets particularly conspicuous when the product alternatives are otherwise very similar,”

The Consumer Choice Model that the researchers devised measures how devisions are made by consumers when given a set of alternative products to consider in their purchasing activities.

The results show that when consumers compared similar items and the information costs were lower, they opted for the item that provided the easiest access to information – even if the product was inferior to the alternative – because they felt confident with their decision. When hard-to-evaluate products were perceived as less attractive, the model proved that just improving the provision of information to customers could significantly boost sales.


“Consumer Choice Under Limited Attention When Alternatives Have Different Information Costs”
Frank Huettner, Tamer Boyacı, Yalçın Akçay
Operations Research Published Online: 1 May 2019