The Impact of Big Data on Firm Performance: An Empirical Investigation

Patrick Bajari, Victor Chernozhukov, Ali Hortacsu and Junichi Suzuki

AEA Papers and Proceedings, 2019, vol. 109, 33-37

Abstract: We examine the impact of "big data" on firm performance in the context of forecast accuracy using proprietary retail sales data obtained from Amazon. We measure the accuracy of forecasts in two relevant dimensions: the number of products (N), and the number of time periods for which a product is available for sale (T). Theory suggests diminishing returns to larger N and T, with relative forecast errors diminishing at rate 1/sqrt(N)+1/sqrt(T). Empirical results indicate gains in forecast improvement in the T dimension but essentially flat N effects.

JEL-codes: C53 C55 L25 L81 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/pandp.20191000
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Citations: View citations in EconPapers (46)

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Working Paper: The Impact of Big Data on Firm Performance: An Empirical Investigation (2018)
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