AbstractLike many new products, newly released creative goods such as books, music records and movies are sometimes ‘surprise’ hits but often flops. Experimental and empirical research suggests that it is hard to predict the demand for a new creative good, and therefore its success, even for industry experts. Rules of thumb on the quantitative properties of demand uncertainty exist for various creative industries – including a rule by Denis Diderot (1763) according to which one out of ten published books is a commercial success. Yet, representative evidence on any industry’s new-product success rate is scarce. This paper studies new-product success in a random sample of novels. Its empirical strategy to identify success – a simple characterization of author-publisher bargaining combined with a parsimonious model of new-product diffusion – is based on the common observation that word-of-mouth is a crucial success factor in creative industries. Parametric and semi-parametric estimation results corroborate Diderot’s rule: between 10 and 15% of novels enjoy significantly positive effects of word-of-mouth. -- Neu veröffentlichte Kreativgüter wie Bücher, Musikalben und Filme sind, ähnlich anderen neuen Produkten, zwar manchmal Überraschungserfolge, meistens jedoch Flops. Laut experimentellem und empirischem Forschungsstand ist es selbst für Branchenexperten schwierig, die Nachfrage nach einem neuen Kreativgut, und damit seinen kommerziellen Erfolg, vorherzusagen. Daumenregeln zu den quantitativen Eigenschaften dieser Nachfrageunsicherheit existieren in einigen kreativen Branchen
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, Research Unit: Competition and Innovation with number SP II 2008-13.
Date of creation: 2008
Date of revision:
Contact details of provider:
Postal: Reichpietschufer 50, 10785 Berlin, Germany
Phone: ++49 - 30 - 25491 - 0
Fax: ++49 - 30 - 25491 - 684
Web page: http://www.wzb.eu/
More information through EDIRC
New-product success rate; demand uncertainty; word-of-mouth; creative industries; unter anderem eine Regel von Denis Diderot (1763); wonach eines von zehn veröffentlichten Büchern ein kommerzieller Erfolg ist. Allerdings mangelt es an repräsentativer Evidenz zu der Erfolgsrate neuer Produkte; gleich in welcher Branche. Dieses Papier untersucht den Erfolg neuer Produkte in einer zufälligen Stichprobe von Romanen. Die verwendete empirische Strategie zur Identifikation von Erfolg;
Other versions of this item:JEL classification:
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
- Z1 - Other Special Topics - - Cultural Economics
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Deneckere, Raymond & Marvel, Howard P & Peck, James, 1997.
"Demand Uncertainty and Price Maintenance: Markdowns as Destructive Competition,"
American Economic Review,
American Economic Association, vol. 87(4), pages 619-41, September.
- Howard P. Marvel & Raymond Deneckere & James Peck, 1995. "Demand Uncertainty and Price Maintainance: Markdowns as Destructive Competition," Working Papers 018, Ohio State University, Department of Economics.
- De Vany, Arthur S. & Walls, W. David, 2004. "Motion picture profit, the stable Paretian hypothesis, and the curse of the superstar," Journal of Economic Dynamics and Control, Elsevier, vol. 28(6), pages 1035-1057, March.
- Jacob Goldenberg & Donald R. Lehmann & David Mazursky, 2001. "The Idea Itself and the Circumstances of Its Emergence as Predictors of New Product Success," Management Science, INFORMS, vol. 47(1), pages 69-84, January.
- Clerides, Sofronis K., 2002. "Book value: intertemporal pricing and quality discrimination in the US market for books," International Journal of Industrial Organization, Elsevier, vol. 20(10), pages 1385-1408, December.
- Bulow, Jeremy & Klemperer, Paul, 1996. "Auctions versus Negotiations," American Economic Review, American Economic Association, vol. 86(1), pages 180-94, March.
- Richard E. Caves, 2003. "Contracts Between Art and Commerce," Journal of Economic Perspectives, American Economic Association, vol. 17(2), pages 73-83, Spring.
- Dana, James D, Jr & Spier, Kathryn E, 2001. "Revenue Sharing and Vertical Control in the Video Rental Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 49(3), pages 223-45, September.
- David E. Giles, 2005.
"Superstardom in the U.S. Popular Music Industry Revisited,"
Econometrics Working Papers
0511, Department of Economics, University of Victoria.
- Giles, David E., 2006. "Superstardom in the US popular music industry revisited," Economics Letters, Elsevier, vol. 92(1), pages 68-74, July.
- Boswijk, H. Peter & Franses, Philip Hans, 2005. "On the Econometrics of the Bass Diffusion Model," Journal of Business & Economic Statistics, American Statistical Association, vol. 23, pages 255-268, July.
- Alan T. Sorensen, 2007. "BESTSELLER LISTS AND PRODUCT VARIETY -super-* ," Journal of Industrial Economics, Wiley Blackwell, vol. 55(4), pages 715-738, December.
- Dina Mayzlin & Judith A. Chevalier, 2003.
"The Effect of Word of Mouth on Sales: Online Book Reviews,"
Yale School of Management Working Papers
ysm413, Yale School of Management.
- Judith A. Chevalier & Dina Mayzlin, 2003. "The Effect of Word of Mouth on Sales: Online Book Reviews," NBER Working Papers 10148, National Bureau of Economic Research, Inc.
- Prince, Jeffrey T. & Simon, Daniel H., 2009. "Has the Internet accelerated the diffusion of new products?," Research Policy, Elsevier, vol. 38(8), pages 1269-1277, October.
- Jonathan Beck, 2006.
"The Sales Effect of Word of Mouth: A Model for Creative Goods and Estimates for Novels,"
CIG Working Papers
SP II 2006-16, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
- Jonathan Beck, 2007. "The sales effect of word of mouth: a model for creative goods and estimates for novels," Journal of Cultural Economics, Springer, vol. 31(1), pages 5-23, March.
- Richard Jensen, 1988. "Information Cost and Innovation Adoption Policies," Management Science, INFORMS, vol. 34(2), pages 230-239, February.
- Dellarocas, Chrysanthos, 2003. "The Digitization of Word-of-mouth: Promise and Challenges of Online Feedback Mechanisms," Working papers 4296-03, Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Chrysanthos Dellarocas, 2003. "The Digitization of Word of Mouth: Promise and Challenges of Online Feedback Mechanisms," Management Science, INFORMS, vol. 49(10), pages 1407-1424, October.
- R. Boadway, 2004. "Book Reviews," Journal of Economics, Springer, vol. 83(1), pages 95-98, 09.
- Christophe Van den Bulte & Yogesh V. Joshi, 2007. "New Product Diffusion with Influentials and Imitators," Marketing Science, INFORMS, vol. 26(3), pages 400-421, 05-06.
- Edoardo Gaffeo & Antonello E. Scorci & Laura Vici, 2008.
"Demand Distribution Dynamics in Creative Industries: the Market for Books in Italy,"
Department of Economics Working Papers
0804, Department of Economics, University of Trento, Italia.
- Gaffeo, Edoardo & Scorcu, Antonello E. & Vici, Laura, 2008. "Demand distribution dynamics in creative industries: The market for books in Italy," Information Economics and Policy, Elsevier, vol. 20(3), pages 257-268, September.
- Edoardo Gaffeo & Antonello E. Scorcu & Laura Vici, 2008. "Demand Distribution Dynamics in Creative Industries: the Market for Books in Italy," Working Paper Series 09-08, The Rimini Centre for Economic Analysis, revised Jan 2008.
- E. Gaffeo & A. E. Scorcu & L. Vici, 2008. "Demand Distribution Dynamics in Creative Industries: the Market for Books in Italy," Working Papers 630, Dipartimento Scienze Economiche, Universita' di Bologna.
- repec:cup:cbooks:9780521848053 is not listed on IDEAS
- Bronwyn H. Hall & Beethika Khan, 2004.
"Adoption of New Technology,"
Development and Comp Systems
- Bronwyn H. Hall & Beethika Khan, 2003. "Adoption of New Technology," NBER Working Papers 9730, National Bureau of Economic Research, Inc.
- Hall, Bronwyn H. & Khan, Beethika, 2003. "Adoption of New Technology," Department of Economics, Working Paper Series qt3wg4p528, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Jonathan Beck, 2004. "Fixed, Focal, Fair? Book Prices Under Optional Resale Price Maintenance," CIG Working Papers SP II 2004-15, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
- M. C. Jones, 2006. "Book Review," Journal of Applied Statistics, Taylor and Francis Journals, vol. 33(10), pages 1149-1151.
- Gérard P. Cachon & Martin A. Lariviere, 2005. "Supply Chain Coordination with Revenue-Sharing Contracts: Strengths and Limitations," Management Science, INFORMS, vol. 51(1), pages 30-44, January.
- Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-58, December.
- C. E. Bannier, 2004. "Book Reviews," Journal of Economics, Springer, vol. 83(1), pages 98-102, 09.
- Ken Hendricks & Alan Sorensen, 2009. "Information and the Skewness of Music Sales," Journal of Political Economy, University of Chicago Press, vol. 117(2), pages 324-369, 04.
- Benny Moldovanu & Manfred Tietzel, 1998. "Goethe's Second-Price Auction," Journal of Political Economy, University of Chicago Press, vol. 106(4), pages 854-859, August.
- Sofronis Clerides & George Kassinis, 2009. "Modeling the diffusion of strategies: an application to exporting," Industrial and Corporate Change, Oxford University Press, vol. 18(3), pages 415-434, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.