Is The Daily Deal Social Shopping?: An Empirical Analysis of Purchase and Redemption Time of Daily-Deal Coupons∗

Shortly after Groupon started its business in 2008, daily-deal sites became new shopping places for online shoppers. Daily deals are offered in a coupon format with huge price discounts and have social shopping features that involve collective actions. In this paper we use individual-level panel data from one of the major daily-deal sites in Korea to analyze how online shoppers change their purchase and redemption behaviors as they repeat purchases and redemptions. We find evidence that social shopping features deter inexperienced shoppers from buying deals early on. We also find evidence that inexperienced shoppers drive congestion at participating businesses. ∗We are grateful to participants at the 2012 Marketing Science Conference for their comments. All errors are ours. †Corresponding author. Assistant Professor of Economics and Marketing at the Simon Graduate School of Business, University of Rochester, [email protected]. ‡Graduate Student, College of Business Administration, Seoul National University, [email protected] §Associate Professor of Management Information System, College of Business Administration, Seoul National University, [email protected] ¶Ph.D. Candidate, College of Business Administration, Seoul National University, [email protected]