We examine whether social networks facilitate online markets using data from a leading peer-to-peer lending website. We find that borrowers with social ties are consistently more likely to have their loans funded and receive lower interest rates; however, most borrowers with social ties are more...

It is not surprising that the financing of early-stage creative projects and ventures is typically geographically localized since these types of funding decisions are usually predicated on personal relationships and due diligence requiring face-to-face interactions in response to high levels of...

Digitization has led to product proliferation, straining traditional institutions for product discovery; but digitization has also spawned crowd-based rating systems. We compare the relative impacts of professional critics and crowd-based Amazon star ratings on consumer welfare in book...

We examine the effect of consumer reviews on relative sales of books on Amazon.com and BarnesandNoble.com. We find that 1) reviews are overwhelmingly positive at both sites, but there are more reviews and longer reviews at Amazon.com, 2) an improvement in a book's reviews leads to an increase in...

Social media data presents challenges for forecasters since one must convert text into data and deal with issues related to these measures being collected at different frequencies and volumes than traditional financial data. In this paper, we use a deep learning algorithm to measure sentiment...

A growing body of empirical literature finds that consumers are relatively limited in how much they search over product characteristics. We assemble a dataset of search and purchase behavior from eBay to quantify the returns, and thus implied costs, to consumer search on the internet. The...

Search frictions can explain why the "law of one price" fails in retail markets and why even firms selling commodity products have pricing power. In online commerce, physical search costs are low, yet price dispersion is common. We use browsing data from eBay to estimate a model of consumer...

Data on sales of memory modules are used to explore several aspects of e-retail demand. There is a strong relationship between e-retail sales to a given state and sales tax rates that apply to purchases from online retailers. This suggests that there is substantial substitution between online...

We survey a representative sample of U.S. individuals about how well leading academic theories describe their financial beliefs and decisions. We find substantial support for many factors hypothesized to affect portfolio equity share, particularly background risk, investment horizon, rare...

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 stringency and accuracy, (2)...