Publications

December 2016
Article

Fake It Till You Make It: Reputation, Competition, and Yelp Review Fraud

By: Michael Luca and Georgios Zervas

Consumer reviews are now part of everyday decision making. Yet, the credibility of these reviews is fundamentally undermined when businesses commit review fraud, creating fake reviews for themselves or their competitors. We investigate the economic incentives to commit... View Details

Keywords: Ethics; Marketing Reference Programs

Purchase

September 2018
Article

Aggregation of Consumer Ratings: An Application to Yelp.com

By: Weijia Dai, Ginger Jin, Jungmin Lee and Michael Luca

Because consumer reviews leverage the wisdom of the crowd, the way in which they are aggregated is a central decision faced by platforms. We explore this "rating aggregation problem" and offer a structural approach to solving it, allowing for (1) reviewers to vary in... View Details

Keywords: User Generated Content; Crowdsourcing; Yelp; Social and Collaborative Networks; Information; Internet and the Web; Learning; Mathematical Methods; E-commerce

2016
Working Paper

Reviews, Reputation, and Revenue: The Case of Yelp.com

By: Michael Luca

Do online consumer reviews affect restaurant demand? I investigate this question using a novel dataset combining reviews from the website Yelp.com and restaurant data from the Washington State Department of Revenue. Because Yelp prominently displays a restaurant's... View Details

Keywords: Revenue; Network Effects; Reputation; Social and Collaborative Networks; Food and Beverage Industry; Service Industry; Washington (state, US)

SSRN

26 Jul 2022
Research & Ideas

Burgers with Bugs? What Happens When Restaurants Ignore Online Reviews

restaurants, causing consumers to avoid those with bad ratings. Restaurants, in turn, often respond by cleaning up their act, according to an analysis of Yelp reviews, OpenTable reservations, and data from the New York City Department of... View Details

Keywords: by Kara Baskin; Entertainment & Recreation; Food & Beverage; Retail

26 Sep 2017
First Look

First Look at New Research and Ideas, September 26, 2017

innovation in the world: open innovation, user innovation, and citizen innovation. Research into this phenomenon could do much to advance the study and practice of creativity. Download working paper: https://www.hbs.edu/faculty/Pages/item.aspx?num=52919 Nowcasting the... View Details

Keywords: Sean Silverthorne

Research Summary

Crowdsourced reviews

To determine whether online consumer reviews influence the way that reputation is formed, Professor Luca has combined reviews from the website Yelp.com with public restaurant data. He has shown that a one-star increase in Yelp ratings results in a 5- to 9-percent... View Details

04 Oct 2011
Working Paper Summaries

Reviews, Reputation, and Revenue: The Case of Yelp.com

Keywords: by Michael Luca; Food & Beverage

27 Sep 2011
First Look

First Look: September 27

Website Yelp.com and restaurant data from the Washington State Department of Revenue. Because Yelp prominently displays a restaurant's rounded average rating, I can identify the causal impact of Yelp ratings... View Details

Keywords: Sean Silverthorne

28 Jul 2015
First Look

First Look: July 28, 2015

Publisher's link: https://www.hbs.edu/faculty/Pages/item.aspx?num=49412 Forthcoming Management Science Fake It Till You Make It: Reputation, Competition, and Yelp Review Fraud By: Luca, Michael, and Georgios Zervas Abstract—Consumer... View Details

Keywords: Carmen Nobel

May–June 2023
Article

Which Firms Gain from Digital Advertising? Evidence from a Field Experiment

By: Weijia Dai, Hyunjin Kim and Michael Luca

Measuring the returns of advertising opportunities continues to be a challenge for many businesses. We design and run a field experiment in collaboration with Yelp across 18,294 firms in the restaurant industry to understand which types of businesses gain more from... View Details

Keywords: Advertising; Digital Marketing; Outcome or Result

27 Feb 2018
First Look

First Look at New Research and Ideas, February 27, 2018

dividends income as if they were separate sources of income. Download working paper: https://www.hbs.edu/faculty/Pages/item.aspx?num=54113 Nowcasting Gentrification: Using Yelp Data to Quantify Neighborhood Change By: Glaeser, Edward L.,... View Details

Keywords: Sean Silverthorne

May 2020
Article

Digitizing Disclosure: The Case of Restaurant Hygiene Scores

By: Weijia (Daisy) Dai and Michael Luca

Collaborating with Yelp and the city of San Francisco, we revisit a canonical example of quality disclosure by evaluating and helping to redesign the posting of restaurant hygiene scores on Yelp.com. We implement a two-stage intervention that separately identifies... View Details

Keywords: Corporate Disclosure; Consumer Behavior; Knowledge Dissemination; Food and Beverage Industry

Purchase

2016
Chapter

User-Generated Content and Social Media

By: Michael Luca

This paper documents what economists have learned about user-generated content (UGC) and social media. A growing body of evidence suggests that UGC on platforms ranging from Yelp to Facebook has a large causal impact on economic and social outcomes ranging from... View Details

Keywords: User-generated Content; Crowdsourcing; Design Economics; Internet and the Web; Marketing; Economics; Media; Social Media

Article

Product Quality and Entering Through Tying: Experimental Evidence

By: Hyunjin Kim and Michael Luca

Dominant platform businesses often develop products in adjacent markets to complement their core business. One common approach used to gain traction in these adjacent markets has been to pursue a tying strategy. For example, Microsoft pre-installed Internet Explorer... View Details

Keywords: Tying; Platform Strategy; Google; Product; Quality; Digital Platforms; Strategy; Market Entry and Exit

Purchase

23 Jul 2013
First Look

First Look: July 23

and Yelp Review Fraud By: Luca, Michael, and Georgios Zervas Abstract—Review sites have become increasingly important sources of information for consumers. Because these reviews affect sales, businesses have the incentive to game the... View Details

Keywords: Anna Secino

2018
Working Paper

Product Quality and Entering Through Tying: Experimental Evidence

Dominant platform businesses often develop products in adjacent markets to complement their core business. One common approach used to gain traction in these adjacent markets has been to pursue a tying strategy. For example, Microsoft pre-installed Internet Explorer... View Details

Keywords: Market Entry and Exit; Digital Platforms; Competitive Strategy; Product Marketing; Quality

SSRN

October 14, 2019
Article

Designing Better Online Review Systems

By: Geoff Donaker, Hyunjin Kim and Michael Luca

Online reviews are transforming the way consumers choose products and services of all sorts. We turn to TripAdvisor to plan a vacation, Zocdoc to find a doctor, and Yelp to choose a new restaurant. Reviews can create value for buyers and sellers alike, but only if they... View Details

Keywords: Reviews; Internet and the Web; Design; Quality; Reputation

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Article

Positioning Brands Against Large Competitors to Increase Sales

By: Neeru Paharia, Jill Avery and Anat Keinan

We explore the effect of having a large dominant competitor and show the conditions under which focusing on a competitive threat, rather than hiding it, can actually help a brand. We demonstrate through lab and field studies that highlighting a large competitor's size... View Details

Keywords: Brands; Brand Management; Brand Positioning; Competitive Positioning; Brands and Branding; Marketing; Marketing Strategy; Consumer Products Industry; Retail Industry; Food and Beverage Industry; Air Transportation Industry; United States