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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/29856
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| Title: | Is Oprah Contagious? Identifying Demand Spillovers in Product Networks |
| Authors: | Carmi, Eyal, Tel-Aviv University
Oestreicher-Singer, Gal, Tel-Aviv University
Sundararajan, Arun, NYU Stern School of Business |
| Issue Date: | 2010 |
| Series/Report no.: | NET Institute Working Paper;10-18 |
| Abstract: | We study the online contagion of exogenous demand shocks generated by
book reviews featured on the Oprah Winfrey TV show and published in the
New York Times, through the co-purchase recommendation network on
Amazon.com. These exogenous events may ripple through and affect the
demand for a 'network' of related books that were not explicitly
mentioned in a review but were located 'close' to reviewed books in this
network. Using a difference-in-differences matched-sample approach, we
identify the extent of the variations caused by the visibility of the
online network and distinguish this effect from variation caused by
hidden product complementarities. Our results show that the demand shock
diffuses to books that are upto five links away from the reviewed book,
and that this diffused shock persists for a substantial number of days,
although the depth and the magnitude of diffusion varies widely across
books at the same network distance from the focal product. We then
analyze how product characteristics, assortative mixing and local
network structure, play a role in explaining this variation in the depth
and persistence of the contagion. Specifically, more clustered local
networks 'trap' the diffused demand shocks and cause it to be more
intense and of a greater duration but restrict the distance of its
spread, while less clustered networks lead to wider contagion of a lower
magnitude and duration. Our results provide new evidence of the
interplay between a firm's online and offline media strategies and we
contribute methods for modeling and analyzing contagion in networks. |
| URI: | http://hdl.handle.net/2451/29856 |
| Appears in Collections: | NET Institute Working Papers Series
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