Is Oprah contagious? The depth of diffusion of demand shocks in a product network

Eyal Carmi, Gal Oestreicher-Singer, Uriel Stettner, Arun Sundararajan

Research output: Contribution to journalArticlepeer-review

Abstract

Recent studies have documented that the contagion of information and behaviors in social networks is generally quite limited. We examine whether this pattern characterizes exogenous demand shocks diffusing in a product network. To this end, we analyze a unique series of demand shocks induced by mass-media book reviews on the Oprah Winfrey television show and in The New York Times. Our identification strategy is based on a difference-in-differences model estimated using two different groups as control, based on propensity-scorebased matching and network proximity to a reviewed book, respectively. Our results show that the diffusion of exogenous demand shocks in the Amazon.com product network is relatively shallow, typically about three edges deep into the network, although the economic impact of this diffusion can often be significant. We link our results to recent findings in the context of diffusion in social networks and discuss managerial implications.

Original languageEnglish
Pages (from-to)207-221
Number of pages15
JournalMIS Quarterly: Management Information Systems
Volume41
Issue number1
DOIs
StatePublished - Mar 2017

Keywords

  • Diffusion
  • Electronic commerce
  • Exogenous demand shock
  • Networks and communities
  • Product networks
  • Social networks

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