Abstract

http://ssrn.com/abstract=1949452
 
 

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Collective Attention and the Dynamics of Group Deals


Mao Ye


Hewlett-Packard Laboratories

Chunyan Wang


Stanford University - Department of Applied Physics

Christina Aperjis


Hewlett-Packard Company - Social Computing Lab

Bernardo A. Huberman


Hewlett-Packard Laboratories

Thomas E. Sandholm


Hewlett-Packard Laboratories

October 25, 2011


Abstract:     
We present a study of the group purchasing behavior of daily deals in Groupon and LivingSocial and introduce a predictive dynamic model of collective attention for group buying behavior. In our model, the aggregate number of purchases at a given time comprises two types of processes: random discovery and social propagation. We find that these processes are very clearly separated by an inflection point. Using large data sets from both Groupon and LivingSocial we show how the model is able to predict the success of group deals as a function of time. We find that Groupon deals are easier to predict accurately earlier in the deal lifecycle than LivingSocial deals due to the final number of deal purchases saturating quicker. One possible explanation for this is that the incentive to socially propagate a deal is based on an individual threshold in LivingSocial whereas it is based on a collective threshold, which for the most part is reached very early on in Groupon. Furthermore, the personal benefit of propagating a deal is also greater in LivingSocial.

Number of Pages in PDF File: 10

Keywords: economics of attention, group deals

JEL Classification: D70

working papers series


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Date posted: October 27, 2011 ; Last revised: November 29, 2011

Suggested Citation

Ye, Mao and Wang, Chunyan and Aperjis, Christina and Huberman, Bernardo A. and Sandholm, Thomas E., Collective Attention and the Dynamics of Group Deals (October 25, 2011). Available at SSRN: http://ssrn.com/abstract=1949452 or http://dx.doi.org/10.2139/ssrn.1949452

Contact Information

Mao Ye
Hewlett-Packard Laboratories ( email )
1501 Page Mill Road
Palo Alto, CA 94304
United States
Chunyan Wang
Stanford University - Department of Applied Physics ( email )
CA
United States
Christina Aperjis
Hewlett-Packard Company - Social Computing Lab ( email )
1501 Page Mill Road
Palo Alto, CA 9434
United States
Bernardo A. Huberman (Contact Author)
Hewlett-Packard Laboratories ( email )
1501 Page Mill Road
Palo Alto, CA 94301
United States
650-857-5318 (Phone)
Thomas E. Sandholm
Hewlett-Packard Laboratories ( email )
1501 Page Mill Road
Palo Alto, CA 94304
United States
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