The Impact of an Augmented Reality Game on Local Businesses: A Study of Pokemon Go on Restaurants

Information Systems Research (Forthcoming)

46 Pages Posted: 15 May 2017 Last revised: 28 Nov 2020

See all articles by Vandith Pamuru

Vandith Pamuru

Indian School of Business

Warut Khern-am-nuai

McGill University - Desautels Faculty of Management

Karthik Natarajan Kannan

Purdue University

Date Written: November 21, 2020

Abstract

Pokemon Go, a mobile game that utilizes the augmented reality (AR) technology, garnered tremendous public interest upon release with an average of 20 million active daily users. The game combines geo-spatial elements with gamification practices to incentivize user movement in the physical world. In this study, we examine the potential externalities that such incentives may have on associated businesses. Particularly, we study the impact of Pokemon Go on local restaurants by using online reviews as a proxy for consumer engagement and perception. We treat the release of Pokemon Go as a natural experiment and study the post-release impact on associated restaurants. We find that restaurants associated with Pokemon Go do indeed enjoy a higher level of consumer engagement and more positive consumer perception. In addition, we find that the characteristics of a restaurant moderate these effects significantly. To the best of our knowledge, our study is the first to examine the economic implications of augmented-reality applications. Therefore, our research lays the foundations for future studies that examine how augmented-reality applications affect consumer economic behavior. Our study also provides insights for business owners and policymakers regarding the potential value of being associated with AR-based applications.

Keywords: Pokemon Go, Augmented Reality, Hedonic Utility, Natural Experiment, Economics of IS,

Suggested Citation

Pamuru, Vandith and Khern-am-nuai, Warut and Kannan, Karthik Natarajan, The Impact of an Augmented Reality Game on Local Businesses: A Study of Pokemon Go on Restaurants (November 21, 2020). Information Systems Research (Forthcoming), Available at SSRN: https://ssrn.com/abstract=2968221 or http://dx.doi.org/10.2139/ssrn.2968221

Vandith Pamuru

Indian School of Business ( email )

Hyderabad, Gachibowli 500 019
India

Warut Khern-am-nuai (Contact Author)

McGill University - Desautels Faculty of Management ( email )

1001 Sherbrooke St. West
Montreal, Quebec H3A1G5 H3A 2M1
Canada

Karthik Natarajan Kannan

Purdue University ( email )

Krannert School of Management
West Lafayette, IN 47907
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
500
Abstract Views
2,635
rank
67,129
PlumX Metrics