Yale University
Thursday December 8th, 1:30-2:30 PM Mudd 1127
Abstract:
Daily deal sites have become the latest Internet sensation, providing discounted offers to customers
for restaurants, ticketed events, services, and other items. We begin by undertaking a study of the economics of
daily deals on the web, based on a dataset we compiled by monitoring Groupon and LivingSocial sales in 20 large
cities over several months. We use this dataset to characterize deal purchases; glean insights about operational
strategies of these firms; and evaluate customers' sensitivity to factors such as price, deal scheduling, and
limited inventory. We then marry our daily deals dataset with additional datasets we compiled from Facebook and
Yelp users to study the interplay between social networks and daily deal sites. First, by studying user activity
on Facebook while a deal is running, we provide evidence that daily deal sites benefit from significant word-of-mouth
effects during sales events, consistent with results predicted by cascade models. Second, we consider the effects of
daily deals on the longer-term reputation of merchants, based on their Yelp reviews before and after they run a
daily deal. Our analysis shows that while the number of reviews increases significantly due to daily deals, average
rating scores from reviewers who mention daily deals are 10% lower than scores of their peers on average.
Speaker Biography:
Giorgos Zervas is a Simons Postdoctoral Fellow at Yale and an Affiliate at the Center for Research on Computation and
Society (CRCS) at Harvard. He is interested in the descriptive analysis of internet markets and the ways in which
economic information is shaping them. He recently completed his PhD at Boston
University under the supervision of John Byers and Michael Mitzenmacher (from Harvard.)