Is Oprah Contagious? Identifying Demand Spillovers in Online Networks

32 Pages Posted: 20 Oct 2010 Last revised: 31 Aug 2012

Eyal Carmi

Tel Aviv University - Faculty of Management; New York University - Stern School of Business

Gal Oestreicher-Singer

Tel Aviv University - Coller School of Management

Arun Sundararajan

New York University (NYU): Stern School of Business and Center for Urban Science+Progress

Date Written: August 3, 2012

Abstract

We study the spread of exogenous demand shocks generated by book reviews featured on the Oprah Winfrey TV show and published in the New York Times through the online co-purchase recommendation network on Amazon.com. We leverage the co-purchase recommendation network on Amazon.com to determine how such exogenous events might affect the demand for books that were not explicitly mentioned in a review but are located “close” to reviewed books in a product network. Our results show that the demand shock diffuses to books that are up to three links away from the reviewed book. However, the magnitude of diffusion varies widely across books at the same network distance from reviewed products. We also describe how product characteristics, assortative mixing and network properties can explain this variation in the depth of contagion. We discuss the significance of these results and their implications for the design of networks of products as well as for optimizing digital marketing spillovers.

Keywords: ecommerce, product networks, networks

JEL Classification: L11, M15, M21

Suggested Citation

Carmi, Eyal and Oestreicher-Singer, Gal and Sundararajan, Arun, Is Oprah Contagious? Identifying Demand Spillovers in Online Networks (August 3, 2012). NET Institute Working Paper No. 10-18. Available at SSRN: https://ssrn.com/abstract=1694308 or http://dx.doi.org/10.2139/ssrn.1694308

Eyal Carmi

Tel Aviv University - Faculty of Management ( email )

P.O. Box 39010
Ramat Aviv Tel Aviv 69972, 69978
Israel

HOME PAGE: http://www.math.tau.ac.il/~carmieya/

New York University - Stern School of Business ( email )

44 West Fourth Street
New York, NY 10012
United States

HOME PAGE: http://pages.stern.nyu.edu/~ecarmi/

Gal Oestreicher-Singer

Tel Aviv University - Coller School of Management ( email )

Tel Aviv
Israel

Arun Sundararajan (Contact Author)

New York University (NYU): Stern School of Business and Center for Urban Science+Progress ( email )

44 West 4th Street, KMC 8-90
New York, NY 10012
United States

HOME PAGE: http://oz.stern.nyu.edu/

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