Michael Luca
There are 5 articles for this faculty member.
About Faculty in this Article:

Michael Luca is an assistant professor in the Negotiation, Organizations, and Markets Unit at Harvard Business School.
What Makes a Critic Tick? Connected Authors and the Determinants of Book Reviews
| Authors: | Loretti I. Dobrescu, Michael Luca, and Alberto Motta |
|---|---|
| Published: | April 26, 2012 |
| Paper Release Date: | March 2012 |
| Feature: | Working Papers |
The professional critic has long been heralded as the gold standard for evaluating products and services such as books, movies, and restaurants. Analyzing hundreds of book reviews from 40 different newspapers and magazines, Professor Michael Luca and coauthors Loretti Dobrescu and Alberto Motta investigate the determinants of professional reviews and then compare these to consumer reviews from Amazon.com.
Sharpening Your Skills: Online Marketing
| Published: | February 9, 2012 |
|---|---|
| Feature: | Sharpening Your Skills |
| Forum: | open for comment; 2 Comments posted |
In this collection from our archives, Harvard Business School faculty discuss the latest research on online marketing techniques, including consumer reviews, video ads, loyalty programs, and coupon offerings.
Published in 2011
The Yelp Factor: Are Consumer Reviews Good for Business?
| Published: | October 24, 2011 |
|---|---|
| Feature: | Research & Ideas |
| Forum: | open for comment; 13 Comments posted |
In a new study, Assistant Professor Michael Luca shows just how much restaurant reviews on Yelp affect companies' bottom lines. The more difficult question: Are these ratings reliable as a measure of product quality?
Reviews, Reputation, and Revenue: The Case of Yelp.com
| Author: | Michael Luca |
|---|---|
| Published: | October 4, 2011 |
| Paper Release Date: | September 2011 |
| Feature: | Working Papers |
In just six years, Yelp.com has managed to crowdsource 20 million reviews of restaurants and other services by creating and leveraging an impressive social network of people who enjoy writing reviews. But can a bunch of amateur opinionators working for free really transform the restaurant industry, where heavily marketed chains and highly regarded professional critics have long had a stronghold? To answer this question, HBS professor Michael Luca combined Yelp reviews with revenues for every restaurant that operated in Seattle, WA at any point between 2003 and 2009. Applying a new method to tease out the causal effect of reviews (separate from the effect of underlying quality), the study shows that a one-star increase on Yelp leads to a 5 to 9 percent increase in revenue. Yet Yelp doesn't work for all restaurants. Chain restaurants —which already spend heavily on branding —are unaffected by changes in their Yelp ratings. This suggests that consumer reviews present a new way of learning in the Internet age, and are fast becoming a substitute for traditional forms of reputation.
Salience in Quality Disclosure: Evidence from the U.S. News College Rankings
| Authors: | Michael Luca and Jonathan Smith |
|---|---|
| Published: | September 27, 2011 |
| Paper Release Date: | September 2011 |
| Feature: | Working Papers |
Why are the U.S. News and World Report College Rankings so influential? According to this paper by Michael Luca and Jonathan Smith, it's at least in part because U.S. News makes the information so simple. While earlier college guides had already provided useful information about schools, U.S. News did the work of aggregating the information into an easy-to-use ranking, making it more salient for prospective students. The authors show that these rankings matter in a big way: a one-rank improvement leads to a 0.9 percent increase in applicants. However, students tend to ignore the underlying details even though these details carry more information than the overall rank.







