How do recommendation systems work?

Question

I\'ve always been curious as to how these systems work. For example, how do netflix or Amazon determine what recommendations to make based on past purchases and/or ratings?

Answer 1

This is such a commercially important application that Netflix introduced a $1 million prize for improving their recommendations by 10%.

After a couple of years people are getting close (I think they're up around 9% now) but it's hard for many, many reasons. Probably the biggest factor or the biggest initial improvement in the Netflix Prize was the use of a statistical technique called singular value decomposition.

I highly recommend you read If You Liked This, You’re Sure to Love That for an in-depth discussion of the Netflix Prize in particular and recommendation systems in general.

Basically though the principle of Amazon and so on is the same: they look for patterns. If someone bought the Star Wars Trilogy well there's a better than even chance they like Buffy the Vampire Slayer more than the average customer (purely made up example).