Diderot´s rule

Arbeitspapier

Like 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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WZB Discussion Paper ; No. SP II 2008-13

Classification and Topics

• Classification: Wirtschaft ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness ; Entertainment; Media
• Subject: new-product success rate ; demand uncertainty ; word-of-mouth ; creative industries

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Beck, Jonathan
• Event: Veröffentlichung
• (who): Wissenschaftszentrum Berlin für Sozialforschung (WZB)
• (where): Berlin
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/51216
• Last update: 10.03.2025, 11:46 AM CET