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MarketingScience2000INFORMSVol.19,No.1,Winter2000,pp.4–210732-2399/00/1901/0004/$05.001526-548XelectronicISSNConsumerDecisionMakinginOnlineShoppingEnvironments:TheEffectsofInteractiveDecisionAidsGeraldHa¨ubl•ValerieTriftsFacultyofBusiness,UniversityofAlberta,Edmonton,Alberta,CanadaT6G2R6gerald.haeubl@ualberta.ca•trifts@datanet.ab.caAbstractDespitetheexplosivegrowthofelectroniccommerceandtherapidlyincreasingnumberofconsumerswhouseinteractivemedia(suchastheWorldWideWeb)forprepurchaseinfor-mationsearchandonlineshopping,verylittleisknownabouthowconsumersmakepurchasedecisionsinsuchset-tings.Auniquecharacteristicofonlineshoppingenviron-mentsisthattheyallowvendorstocreateretailinterfaceswithhighlyinteractivefeatures.Onedesirableformofinter-activityfromaconsumerperspectiveistheimplementationofsophisticatedtoolstoassistshoppersintheirpurchasede-cisionsbycustomizingtheelectronicshoppingenvironmenttotheirindividualpreferences.Theavailabilityofsuchtools,whichwerefertoasinteractivedecisionaidsforconsum-ers,mayleadtoatransformationofthewayinwhichshop-perssearchforproductinformationandmakepurchasede-cisions.Theprimaryobjectiveofthispaperistoinvestigatethenatureoftheeffectsthatinteractivedecisionaidsmayhaveonconsumerdecisionmakinginonlineshoppingenvironments.Whilemakingpurchasedecisions,consumersareoftenunabletoevaluateallavailablealternativesingreatdepthand,thus,tendtousetwo-stageprocessestoreachtheirde-cisions.Atthefirststage,consumerstypicallyscreenalargesetofavailableproductsandidentifyasubsetofthemostpromisingalternatives.Subsequently,theyevaluatethelat-terinmoredepth,performrelativecomparisonsacrossprod-uctsonimportantattributes,andmakeapurchasedecision.Giventhedifferenttaskstobeperformedinsuchatwo-stageprocess,interactivetoolsthatprovidesupporttoconsumersinthefollowingrespectsareparticularlyvaluable:(1)theinitialscreeningofavailableproductstodeterminewhichonesareworthconsideringfurther,and(2)thein-depthcom-parisonofselectedproductsbeforemakingtheactualpur-chasedecision.Thispaperexaminestheeffectsoftwodeci-sionaids,eachdesignedtoassistconsumersinperformingoneoftheabovetasks,onpurchasedecisionmakinginanonlinestore.Thefirstinteractivetool,arecommendationagent(RA),al-lowsconsumerstomoreefficientlyscreenthe(potentiallyverylarge)setofalternativesavailableinanonlineshoppingenvironment.Basedonself-explicatedinformationaboutaconsumer’sownutilityfunction(attributeimportanceweightsandminimumacceptableattributelevels),theRAgeneratesapersonalizedlistofrecommendedalternatives.Theseconddecisionaid,acomparisonmatrix(CM),isde-signedtohelpconsumersmakein-depthcomparisonsamongselectedalternatives.TheCMallowsconsumerstoorganizeattributeinformationaboutmultipleproductsinanalternativesattributesmatrixandtohavealternativessortedbyanyattribute.Basedontheoreticalandempiricalworkinmarketing,judgmentanddecisionmaking,psychology,anddecisionsupportsystems,wedevelopasetofhypothesespertainingtotheeffectsofthesetwodecisionaidsonvariousaspectsofconsumerdecisionmaking.Inparticular,wefocusonhowuseoftheRAandCMaffectsconsumers’searchforproductinformation,thesizeandqualityoftheirconsiderationsets,andthequalityoftheirpurchasedecisionsinanonlineshop-pingenvironment.Acontrolledexperimentusingasimulatedonlinestorewasconductedtotestthehypotheses.Theresultsindicatethatbothinteractivedecisionaidshaveasubstantialimpactonconsumerdecisionmaking.Aspredicted,useoftheRAreducesconsumers’searcheffortforproductinformation,decreasesthesizebutincreasesthequalityoftheirconsid-erationsets,andimprovesthequalityoftheirpurchasede-cisions.UseoftheCMalsoleadstoadecreaseinthesizebutanincreaseinthequalityofconsumers’considerationsets,andhasafavorableeffectonsomeindicatorsofdecisionquality.Insum,ourfindingssuggestthatinteractivetoolsde-signedtoassistconsumersintheinitialscreeningofavailablealternativesandtofacilitatein-depthcomparisonsamongse-lectedalternativesinanonlineshoppingenvironmentmayhavestrongfavorableeffectsonboththequalityandtheef-ficiencyofpurchasedecisions—shopperscanmakemuchbetterdecisionswhileexpendingsubstantiallylesseffort.Thissuggeststhatinteractivedecisionaidshavethepotentialtodrasticallytransformthewayinwhichconsumerssearchforproductinformationandmakepurchasedecisions.(DecisionMaking;OnlineShopping;ElectronicCommerce;De-cisionAids;RecommendationAgents;ConsumerBehavior;Infor-mationSearch;ConsiderationSets;InformationProcessing)CONSUMERDECISIONMAKINGINONLINESHOPPINGENVIRONMENTSMarketingScience/Vol.19,No.1,Winter20005IntroductionThepopularityofinteractivemediasuchastheWorldWideWeb()hasbeengrowingataveryrapidpace(see,e.g.,GVU1999).Fromamarketingperspec-tive,thishasmanifesteditselfprimarilyintwoways:(1)adrasticincreaseinthenumberofcompaniesthatseektousethe(potential)customers,and(2)therapidadoptionofthe(Albaetal.1997).Thecombinationofthesetwodevelopmentsprovidesabasisforsubstantialgrowthinthecommercialuseofinteractivemedia.Thefocusofthispaperison