Clustering techniques work by identifying groups of consumers who appear to have similar preferences. Once the clusters are created, predictions for an individual can be made by averaging the opinions of the other consumers in that cluster. Some clustering techniques represent each consumer with partial participation in several clusters. The prediction is then an average across the clusters, weighted by degree of participation. Clustering techniques usually produce less-personal recommendations than other methods, and in some cases, the clusters have worse accuracy than nearest neighbor algorithms (Breese et al., 1998). Once the
clustering is complete, however, performance can be very good, since the size of the group that must be analyzed is much smaller. Clustering techniques can also be applied as a “first step” for shrinking the candidate set in a nearest neighbor algorithm or for distributing nearest-neighbor computation across several recommender engines. While dividing the population into clusters may hurt the accuracy or recommendations to users near the fringes of their assigned cluster, pre-clustering may be a worthwhile trade-off between accuracy and throughput.