CoDeR: Counterfactual Demand Reasoning for Sequential Recommendation

Abstract Sequential recommendation systems aim to predict the next item based on users' historical interactions. While traditional methods focus on learning feature representations or user preferences, they often struggle with detecting subtle demand shifts in short sequences, especially when these shifts are obscured by noise or biases. To address these issues, we propose CoDeR (Counterfactual Demand Reasoning), a novel framework designed to handle demand shifts in sequential recommendations with greater precision. CoDeR features two key modules: (1) the User Demand Extraction module, which utilizes self-attention mechanisms and demand graphs to identify and model demand shifts from minimal user interactions; and (2) the Counterfactual Demand Reasoning module, which employs causal effect analysis and backdoor adjustment techniques to distinguish true demand shifts from noisy or biased signals. Our approach represents the first application of counterfactual reasoning to sequential recommendation systems. Comprehensive experiments on three real-world datasets demonstrate that CoDeR significantly outperforms existing baselines.