Fubon Center for Technology, Business and Innovation | Daniel Sands

In my research I develop an industry study of third part evaluators, in which I use the New York City restaurant industry as an empirical setting. This is inherently a cross-disciplinary study that intends to examine the historical interaction of third party evaluators themselves. I identify four critical periods within the NYC restaurant evaluation industry’s development: (1) The formation and development of The New York Times’ “Dining Section”, which represents the first stable restaurant evaluation platforms beginning in 1957; (2) the development and entry of Zagat evaluations during the early 1980s, which highlights a change in competition between different forms of third parties; (3) the rise and introduction of online third party evaluation aggregators (TPEAs) in the late 1990s and early 2000s, such as OpenTable, Yelp!, and TripAdvisor; (4) the 2005 entry of The Michelin Guide into the NYC market, which brought an already legitimized, non-local, third party into the NYC restaurant market.

In examining these critical phases in the development of the NYC restaurant evaluation industry, this work draws attention onto the relationship between third parties and fundamental issues such as the role of new technologies, organizational innovation, legitimacy, and status as being determinants of market behavior. Accordingly, I am able develop an account of how these third party evaluators comprise their own industry within the broader NYC restaurant field. In particular, this work emphasizes that evaluation-focused third parties have historically used technological innovations and analytical tools in order to create distinct identities. This, in turn, has allowed them to strategically occupy distinct market positions that make themselves useful to particular audiences leading to the construction of an industry.

Prior scholarship has largely focused on the role of a single third party and their interaction with downstream consumers. Consequently, a contribution of this work is showing how third parties have come to constitute their own industry by interacting with new technologies, new analytical techniques, firms and consumer audiences, as well as each other. Ultimately, this work intends to show that market construction is endogenous to the introduction and actions of third party evaluators because the activities of third parties shape the behaviors and beliefs of firms and consumers.

Beyond consumer and cultural goods, third parties are also active in many other domains of the economy. Hence, this research provides insight to the consequences of third parties in various, including financial services sectors such as banking, insurance, and securities. At a high level, this research posits ways in which third parties shape the markets they evaluate by affecting the beliefs and behaviors of both producers and consumers. Moreover, this work depicts the complexities within third parties themselves, and it highlights ways in which compete through developing unique market positions. By examining how third parties have responded to changing technological landscapes, this stream research helps shed light onto pathways through which third parties gain influence with market actors.