Details

Autor(en) / Beteiligte

• Beck, Jonathan

Titel

The sales effect of word of mouth: a model for creative goods and estimates for novels

Ist Teil von

• Journal of cultural economics, 2007-01, Vol.31 (1), p.5-23

Ort / Verlag

New York: Springer

Erscheinungsjahr

2007

Quelle

Alma/SFX Local Collection

Beschreibungen/Notizen

• Weekly sales of creative goods—like music records, movies, or books—usually peak shortly after release and then decline quickly. In many cases, however, they follow a hump-shaped pattern where sales increase for some time. A popular explanation for this phenomenon is word of mouth among a population of heterogeneous buyers, but previous studies typically assume buyer homogeneity or neglect word of mouth altogether. In this paper, I study a model of new-product diffusion with heterogeneous buyers that allows for a quantification of the sales effect of word of mouth. The model includes Christmas sales as a special case. All parameters have an intuitive interpretation. Simulation results suggest that the parameters are estimable for data that are not too volatile and that cover a sufficiently large part of a title's life cycle. I estimate the model for four exemplary novels using scanner data on weekly sales.