The impact of assortment size and population density on product evaluation

E-commerce firms such as Amazon, eBay and JD.com extend large assortments across diverse geographical areas, operating under the assumption that online shopping behavior is unaffected by physical location. However, this assumption is increasingly questioned by two contrasting perspectives. One suggests that consumers in densely populated areas benefit less from large assortments, while another argues that large assortments help consumers regain a sense of control in densely populated environments, which can lead to more positive product evaluations. Analyzing a large-scale e-commerce dataset and conducting two follow-up experiments with incentive-compatible measures, we find strong support for the latter perspective. Consumers in densely (vs. sparsely) populated areas evaluate products chosen from large assortments more positively. These findings suggest that managers can tailor assortments to align with population density or use advertisements featuring densely populated areas to improve the evaluation of products chosen from a large assortment.