Ratings on platforms such as Yelp and TripAdvisor can greatly impact high-priced New York City restaurants that service tourists, but have less of an effect on restaurants frequented by “locals” outside of tourist areas, according to new Cornell research.
Ratings on platforms such as Yelp and TripAdvisor can greatly impact high-priced New York City restaurants that service tourists, but have less of an effect on restaurants frequented by “locals” outside of tourist areas, according to new Cornell research.
“In neighborhoods frequented by ‘locals,’ the advent and expansion of internet-based ratings platforms did not result in greater disparities in restaurant sales despite how ubiquitous they are and how frequently we anecdotally use them,” said Jason Greenberg, associate professor of management and organizations at the Peter and Stephanie Nolan School of Hotel Administration in the Cornell SC Johnson College of Business.
Greenberg co-authored the paper, “Rating Systems and Increased Heterogeneity in Firm Performance: Evidence From the New York City Restaurant Industry, 1994-2013,” published Aug. 28 in Strategic Management Journal. The paper was co-authored with New York University Stern School of Business faculty Gino Cattani and Joe Porac and former Stern doctoral student Daniel Sands, now of University College London.
