Final answer:
Amazon will show items bought by other customers who viewed an item you are viewing. This feature helps Amazon to predict future purchasing preferences, enhancing user experience and sales.
Step-by-step explanation:
When Amazon displays items bought by other customers who viewed an item you are viewing, this feature helps Amazon to make predictions about future viewing behavior and purchasing preferences. This technique is part of Amazon's sophisticated data analytics and recommendation algorithms that leverage users' past viewing habits. It is designed to enhance the user experience by suggesting relevant products and thereby potentially increasing sales. Additionally, Amazon's success can be attributed to its efficient production model and cost structure, which allows it to offer competitive prices.
To address the concern of buyers facing imperfect information, sellers can provide comprehensive product descriptions, customer reviews, clear return policies, and money-back guarantees. These measures can help reassure buyers about the quality and suitability of a product. For firms like Amazon and smaller businesses, understanding how to determine what to sell, at what output, and price are critical factors that influence their market success.