Template-Type: ReDIF-Paper 1.0
Author-Name: Markus Lill
Author-Workplace-Name: LMU Munich
Author-Name: Nastasia Gallitz
Author-Workplace-Name: LMU Munich
Author-Name: Lucas Stich
Author-Workplace-Name: University of Wuerzburg
Author-Name: Martin Spann
Author-Workplace-Name: LMU Munich
Title: How Platform Endorsement Shapes Consumer Search and Choice in Online Retail
Abstract: Platform endorsement badges (e.g., Amazon's Choice) are widely believed to shape consumer decisions, yet their effectiveness in complex retail environments---where endorsements compete with rankings, ratings, and other signals---remains not well understood. This article examines Amazon's product-level endorsements using a multi-method approach combining (1) a 50-day large-scale audit of more than 200,000 search results spanning over 90,000 products and (2) a lab-in-the-field experiment that manipulates badge visibility and placement in consumers' natural shopping context. The audit reveals that endorsements are rare (~1.3% of products) and disproportionately assigned to products with lower prices, higher ratings, and those sold or fulfilled by Amazon; receiving a badge is associated with greater search visibility and improved sales performance. The experiment shows that displaying the badge tends to increase click-through and add-to-cart likelihoods, whereas reassigning or masking it tends to reduce these behaviors; however, these effects---while economically meaningful---are estimated with uncertainty, consistent with a multi-cue environment in which endorsement competes with other signals such as search rank and Prime eligibility. Together, the findings indicate that platform endorsement badges shape consumer search and choice behavior even in information-rich retail settings. Implications are discussed for platform design, seller strategy, and regulatory oversight.
Creation-Date: 2026-04-01
File-URL: https://rationality-and-competition.de/wp-content/uploads/discussion_paper/569.pdf
File-Format: Application/pdf
Number: 569
Classification-JEL: D12; D83; L86; M31; 
Keywords: platform endorsements; consumer decision-making; digtial platforms; e-commerce experimentation; 
Handle: RePEc:rco:dpaper:569