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Time spent on New Songs: Word-of-Mouth and Price Effects on Teenager Consumption

Author

Listed:
  • Noémi Berlin

    (Edin. - University of Edinburgh)

  • Anna Bernard

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Guillaume Fürst

    (University of Geneva - Department of Psychology and Educational Sciences - UNIGE - Université de Genève = University of Geneva)

Abstract

The stardom system characterizes creative industries: the demand and revenues are concentrated on a few bestselling books, movies or music. In this paper, we study the demand structure between bestsellers and new artists' productions in the music industry. We set up an experiment where participants face real choices situations. We crate three treatments to isolate the effect of information and incentives on diversity. In a first treatment, music is consumed for free without information. In a second one, subjects receive a prior information on others' evaluation of songs to study the effect of word-of-mouth. Finally, in a third one, a real market is introduced and music is bought. Significant evidence shows that word-of-mouth lowers diversity, while price incentives tend to lift it. In both treatments, subjects also react to the information or incentives nature.

Suggested Citation

  • Noémi Berlin & Anna Bernard & Guillaume Fürst, 2015. "Time spent on New Songs: Word-of-Mouth and Price Effects on Teenager Consumption," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01163907, HAL.
    • Handle: RePEc:hal:cesptp:halshs-01163907
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01163907
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    References listed on IDEAS

    as
    1. Bianchi, Marina, 2002. "Novelty, preferences, and fashion: when goods are unsettling," Journal of Economic Behavior & Organization, Elsevier, vol. 47(1), pages 1-18, January.
    2. Bikhchandani, Sushil & Hirshleifer, David & Welch, Ivo, 1992. "A Theory of Fads, Fashion, Custom, and Cultural Change in Informational Cascades," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 992-1026, October.
    3. Nelson, Phillip, 1970. "Information and Consumer Behavior," Journal of Political Economy, University of Chicago Press, vol. 78(2), pages 311-329, March-Apr.
    4. Adler, Moshe, 1985. "Stardom and Talent," American Economic Review, American Economic Association, vol. 75(1), pages 208-212, March.
    5. Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-858, December.
    6. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 797-817.
    7. Adler, Moshe, 2006. "Stardom and Talent," Handbook of the Economics of Art and Culture, in: V.A. Ginsburgh & D. Throsby (ed.), Handbook of the Economics of Art and Culture, edition 1, volume 1, chapter 25, pages 895-906, Elsevier.
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    Cited by:

    1. Patrizia Lattarulo & Marco Mariani & Laura Razzolini, 2017. "Nudging museums attendance: a field experiment with high school teens," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 41(3), pages 259-277, August.
    2. Marc Bourreau & Marianne Lumeau & Francois Moreau & Jordana Viotto da Cruz, 2019. "Recent or Free? An Experimental Study of the Motivations for Pirating Movies," CESifo Working Paper Series 8036, CESifo.
    3. Bronwyn Coate & Robert Hoffmann, 2022. "The behavioural economics of culture," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 46(1), pages 3-26, March.

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    More about this item

    Keywords

    experimental economics; cultural goods; music industry; Stardom system;
    All these keywords.

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • Z1 - Other Special Topics - - Cultural Economics

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