With the growing pervasiveness of the Internet, online search for products and services is constantly increasing. Most product search engines are based on adaptations of theoretical models devised for information retrieval. However, the decision mechanism that underlies the process of buying a product is different than the process of locating relevant documents or objects.
We propose a theory model for product search based on expected utility theory from economics. Specifically, we propose a ranking technique in which we rank highest the products that generate the highest surplus, after th purchase. In a sense, the top ranked products are the “best value for money” for a specific user. Our approach builds on research on “demand estimation” from economics and presents a solid theoretical foundation on which further research can build on. We build algorithms that take into account consumer demographics, heterogeneity of consumer preferences, and also account for the varying price of the products. We show how to achieve this without knowing the demographics or purchasing histories of individual consumers but by using aggregate demand data. We evaluate our work, by applying the techniques on hotel search. Our extensive user studies, using more than 15,000 user-provided ranking comparisons, demonstrate an overwhelming preference for the rankings generated b our techniques, compared to a large number of existing strong state-of-the-art baselines.