NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Working Papers by Weijia Dai

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Working Papers

May 2014Banning Foreign Pharmacies from Sponsored Search: The Online Consumer Response
with Matthew Chesnes, Ginger Zhe Jin: w20088
Increased competition from the Internet has raised a concern of product quality for online prescription drugs. The Food and Drug Administration (FDA) prohibits the importation of unapproved drugs into the US and the National Association of Boards of Pharmacy (NABP) emphasizes their illegality and cites examples of unsafe drugs from rogue pharmacies. An investigation by the Department of Justice (DOJ) revealed that Google was allowing unapproved Canadian pharmacies to advertise on their search engine and target US consumers. Because of heightened concern to protect consumers, Google agreed to ban non-NABP-certified pharmacies from their sponsored search listings in February 2010 and settled with the DOJ in August 2011. We study how the ban on non-NABP-certified pharmacies from sponsored sea...
November 2012Optimal Aggregation of Consumer Ratings: An Application to Yelp.com
with Ginger Z. Jin, Jungmin Lee, Michael Luca: w18567
Consumer review websites such as Yelp.com leverage the wisdom of the crowd, with each product being reviewed many times (some with more than 1000 reviews). Because of this, the way in which information is aggregated is a central decision faced by consumer review websites. Given a set of reviews, what is the optimal way to construct an average rating? We offer a structural approach to answering this question, allowing for (1) reviewers to vary in stringency (some reviewers tend to leave worse reviews on average) and accuracy (some reviewers are more erratic than others), (2) reviewers to be influenced by existing reviews, and (3) product quality to change over time. We apply this approach to reviews from Yelp.com to derive optimal ratings for each restaurant (in contrast with the arithmetic...

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