Imke Reimers (Northeastern University)
will give a talk on
"Platform Promotion and Consumer Welfare: Evidence from the Amazon Books Page"
in the DICE research seminar.
Abstract: With experience goods, such as books, consumers are guided to product choices by reviews, word of mouth, and other information channels. Retailer actions can also affect consumer choice, and this paper explores the impact of Amazon's promotional choices on book sales and consumer surplus. Using detailed daily data on which books are promoted on Amazon's book page, along with daily estimates of title-level sales, we estimate the causal impact of Amazon's promotion choices on book sales. The effect of Amazon promotion is substantial, accounting for about a tenth of the total sales of promoted books, and it is significantly larger than the effect of the most prominent book review channel (the New York Times). Due to Amazon's substantial role in the US book market, such influence on consumer purchase decisions raises concerns about a retailer's exercise of power. We assess Amazon's promotional choices to the promotion choices of its largest bookselling rival, Barnes \& Noble, along with the books reviewed by the New York Times and USA Today bestsellers. We find that the books Amazon promotes are similar in consumer appeal to those chosen by its rivals, leading to consumer welfare impacts from promotion that are similar to or exceed those arising from other plausible sets of promoted books. We conclude that, whatever the potential negative effects of platform power, Amazon’s choices of book promotions create large consumer benefits.
You can find Imke’s website here: https://imkereimers.weebly.com/
She will be available for individual meetings on the day of the seminar. Henning and Simon will coordinate the schedule. Please write them an email () if you want to reserve a slot.