A Very Brief History of the Evolution of Choice

The recently awarded prize by Netflix for coming up with a more accurate prediction algorithm has been on my mind lately. To be more precise, what I’ve been thinking about is what the winners have achieved with their algorithm. That is, why is being able to predict what people will like so important, or in more “useful” terms, what is the value of being able to predict what people will like?

Along those lines, I’ve been thinking about how market offerings have evolved to provide people with choices, and then later to help them select among their choices.

The situation is this: a person must satisfy a need or want: select a book to read, a movie to watch, a car to buy, or a doctor to see.

The first question that comes to mind is “what are my options.” Either in anticipation of and/or in response to this question, suppliers have sought to help consumers first define, then provide access to, their universe of options. The epitome of the market response to “what are my options?” is the Yellow Pages. Abstracting a bit, the Yellow Pages provides as complete a listing as possible of all the options available to a consumer seeking to meet a particular need. And as the costs of communication and transportation have decreased, this list of options available to consumers has grown exponentially, from options available locally, to regionally, to nationally, to globally.

The second, more evolved question is “given my options, which should I choose?” Again, either in anticipation of and/or in response to this question, suppliers have sought to help consumers choose among their various options, through branding/reputation; the provision of large, prominent, or frequent ads; or the provision of product or price information.

A refinement of “here’s what I have to offer” response to the question of “which option should I choose?” is the “here’s what other people chose” response. Best-seller lists and lists of awards won by various products and manufacturers are the classic reply for “here’s what other people chose.” Of course, the implication here is that the items that people chose most often must be the best.

After that, increasingly available types and amounts of information enabled suppliers to improve upon the “here’s what other people chose” response by also providing “and here’s what they thought about it.” We now discovered that just because people chose something, doesn’t mean they liked it. Knowing which items people not only chose, but whether or not they actually liked them, proves to be enormously useful in helping people make the right choices.

Normal.dotm 0 0 1 19 113 QuantAA 1 1 138 12.0 0 false 18 pt 18 pt 0 0 false false false Amazon further helped evolve the problem of choice my making recommendations to consumers based on items they had purchased or were thinking about purchasing ("people who bought this also bought that.")

And then just when you thought it couldn’t get any better, Netflix came out with a way of telling consumers “given your stated/historical preferences, here’s what you will probably think about this item.”