Measuring Promotion and Information Discovery Online

Culling the herd: Using real world randomized experiments to measure social bias with known costly goods
Miguel Godinho de Matos, Pedro Ferreira, Michael D. Smith, Rahul Telang. 2015. Culling the herd: Using real world randomized experiments to measure social bias with known costly goods. Management Science. Forthcoming.
QUESTION: How do online peer reviews impact consumer behavior and how prone are peer reviews to strategic manipulation?
RESULT: “Peer ratings influence consumer behavior independently from underlying product quality…there is little evidence of long-term bias as a result of herding effects…specifically, when movies are artificially promoted or demoted in peer rating lists, subsequent reviews cause them to return to their true quality position relatively quickly.”

Substitution or Promotion The Impact of Price Discounts on Cross-Channel Sales of Digital Movies
Gong, Jing, Michael D. Smith, Rahul Telang. 2015. Substitution or Promotion? The Impact of Price Discounts on Cross-Channel Sales of Digital Movies. Journal of Retailing. 91(2) 343-357.
QUESTION: How do price discounts impact own- (purchase) and cross-channel (rental) consumption for digital content?
RESULTS: “Digital movie consumers are highly sensitive to price promotions.  Price promotions for digital movie sales do not seem to cannibalize digital rentals.  There seem to be a positive spillover across [the purchase and rental] channels from price promotions.”

Measuring Information Diffusion in an Online Community
Garg, Rajiv, Michael D. Smith, Rahul Telang. 2011. Measuring Information Diffusion in an Online Community. Journal of Management Information Systems, 28(2) 11-37.
QUESTION: What is the impact of peer influence in online social networks?
RESULTS: “On average, peers are six times more likely to diffuse a new song to other network users than they would be in the absence of those peers.”

Location, Location, Location: An Analysis of Profitability and Position in Online Advertising Markets
Agarwal, Ashish, Kartik Hosanagar, Michael D. Smith. 2011. Location, Location, Location: An Analysis of Profitability and Position in Online Advertising Markets. Journal of Marketing Research, 48 1057-1073.
QUESTION: What is the impact of ad placement on revenues and profits generated from sponsored search for products offered at different ranks within displayed advertisements?
RESULTS: “An advertisement’s revenue initially increases with position for longer keyphrases. As the ranking mechanism used by the search engines does not account for conversion rate, ads placed in the top position do not always maximize revenues…due to a higher rate of decrease in cost with position.”

The Perfect Storm:  Using Snowstorms to Analyze the Effect of Theatrical Attendance on the Demand for Subsequently Released DVDs
Choi, Patrick, Peter Boatwright, Michael D. Smith. 2015. The Perfect Storm: Using Snowstorms to Analyze the Effect of Theatrical Attendance on the Demand for Subsequently Released DVDs. (http://ssrn.com/abstract=2639303)
QUESTION:  Does consumption in the theatrical channel complement or substitute for consumption in a movie’s home entertainment release window?
RESULT: “Theatrical demand casually increases DVD/Blu-ray demand. Specifically, a 10 percent increase (decline) in theatrical attendance causes an 8 percent increase (decline) in DVD/Blu-ray demand.”

Super Returns?  The Effects of Ads on Product Demand
Stephens-Davidowitz, Seth, Hal Varian, Michael D. Smith. 2015. Super Returns? The Effects of Ads on Product Demand. (http://people.ischool.berkeley.edu/~hal/Papers/2015/super.pdf)
QUESTION:  What is the causal effect of Super Bowl advertising on demand for movies?
RESULT: “On average, the movies in our sample experience and incremental increase of $8.4 million in opening weekend box office revenue from a $3 million Super Bowl advertisement.”