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| Author: | Beck, J. |
| Title: | The sales effect of word of mouth: a model for creative goods and estimates for novels |
| Journal: | Journal of Cultural Economics
2007 : VOL. 31:1, p. 5-23 |
| Index terms: | advertising arts culture literature new products diffusion models |
| Language: | eng |
| Abstract: | Weekly sales (here as: w-sls.) of creative goods, e.g. movies, music records, or books, usually peak shortly after release then declining quickly. However, in many cases, a hump-shaped pattern is followed where sales increase for some time. An explanation is the word of mouth (as: w-of-m.) among a population of heterogeneous (as: htg.) buyers. However, previous studies typically assume buyer homogeneity or neglect w-of-m. alltogether. This paper studies a model of new-product diffusion with htg. buyers, allowing for a quantification of the sales effect of w-of-m. As a special case, the model includes Christmas sales. Simulation results suggest that the parameters are estimable for data not too volatile and covering a sufficiently large part of a title's life cycle. The model is estimated for four exemplary novels using scanner data on w-sls. |
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