IDEAS home Printed from https://ideas.repec.org/a/eee/jeborg/v194y2022icp550-567.html
   My bibliography  Save this article

Bestseller lists and product discovery in the subscription-based market: Evidence from music streaming

Author

Listed:
  • Sim, Jaeung
  • Park, Jea Gon
  • Cho, Daegon
  • Smith, Michael D.
  • Jung, Jaemin

Abstract

Our study analyzes the impact of hourly-updated bestseller lists on music discovery in a digital streaming platform to provide evidence of whether and why bestseller lists affect consumer decisions in the subscription-based market. We circumvent the problem of demand-popularity simultaneity by leveraging high-frequency data and a regression discontinuity design. We find that being added to the top 100 charts increases song discovery by 11–13%. Furthermore, a series of analyses suggest that the saliency effect, instead of observational learning, is more likely to drive this behavioral change among streaming users. Specifically, we find that a song's chart entrance increases repeat consumption, normative rank positions within the top 100 lists do not demonstrate significant discontinuity, and an artist or a song's prior popularity does not moderate this effect.

Suggested Citation

  • Sim, Jaeung & Park, Jea Gon & Cho, Daegon & Smith, Michael D. & Jung, Jaemin, 2022. "Bestseller lists and product discovery in the subscription-based market: Evidence from music streaming," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 550-567.
    • Handle: RePEc:eee:jeborg:v:194:y:2022:i:c:p:550-567
    DOI: 10.1016/j.jebo.2021.12.030
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167268121005400
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jebo.2021.12.030?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. MacKinnon, James G & Magee, Lonnie, 1990. "Transforming the Dependent Variable in Regression Models," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(2), pages 315-339, May.
    2. Luis Aguiar & Joel Waldfogel, 2018. "Platforms, Promotion, and Product Discovery: Evidence from Spotify Playlists," JRC Working Papers on Digital Economy 2018-04, Joint Research Centre.
    3. Tibor Besedes & Cary Deck & Sudipta Sarangi & Mikhael Shor, 2015. "Reducing Choice Overload without Reducing Choices," The Review of Economics and Statistics, MIT Press, vol. 97(4), pages 793-802, October.
    4. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
    5. Raluca M. Ursu, 2018. "The Power of Rankings: Quantifying the Effect of Rankings on Online Consumer Search and Purchase Decisions," Marketing Science, INFORMS, vol. 37(4), pages 530-552, August.
    6. repec:tpr:restat:v:97:y:2015:i:5:p:793-802 is not listed on IDEAS
    7. Michael Anderson & Jeremy Magruder, 2012. "Learning from the Crowd: Regression Discontinuity Estimates of the Effects of an Online Review Database," Economic Journal, Royal Economic Society, vol. 122(563), pages 957-989, September.
    8. Jie Cao & Hao Liang & Xintong Zhan, 2019. "Peer Effects of Corporate Social Responsibility," Management Science, INFORMS, vol. 65(12), pages 5487-5503, December.
    9. Marc F. Bellemare & Casey J. Wichman, 2020. "Elasticities and the Inverse Hyperbolic Sine Transformation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(1), pages 50-61, February.
    10. Allcott, Hunt, 2011. "Social norms and energy conservation," Journal of Public Economics, Elsevier, vol. 95(9-10), pages 1082-1095, October.
    11. Mathew S. Isaac & Robert M. Schindler, 2014. "The Top-Ten Effect: Consumers' Subjective Categorization of Ranked Lists," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 40(6), pages 1181-1202.
    12. Alan T. Sorensen, 2017. "Bestseller Lists and the Economics of Product Discovery," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 87-101, September.
    13. Helmers, Christian & Krishnan, Pramila & Patnam, Manasa, 2019. "Attention and saliency on the internet: Evidence from an online recommendation system," Journal of Economic Behavior & Organization, Elsevier, vol. 161(C), pages 216-242.
    14. Aguiar, Luis & Waldfogel, Joel, 2018. "As streaming reaches flood stage, does it stimulate or depress music sales?," International Journal of Industrial Organization, Elsevier, vol. 57(C), pages 278-307.
    15. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    16. Imbens, Guido W. & Lemieux, Thomas, 2008. "Regression discontinuity designs: A guide to practice," Journal of Econometrics, Elsevier, vol. 142(2), pages 615-635, February.
    17. Miguel Godinho de Matos & Pedro Ferreira & Michael D. Smith & Rahul Telang, 2016. "Culling the Herd: Using Real-World Randomized Experiments to Measure Social Bias with Known Costly Goods," Management Science, INFORMS, vol. 62(9), pages 2563-2580, September.
    18. Alan T. Sorensen, 2007. "Bestseller Lists And Product Variety," Journal of Industrial Economics, Wiley Blackwell, vol. 55(4), pages 715-738, December.
    19. Catherine Tucker & Juanjuan Zhang, 2011. "How Does Popularity Information Affect Choices? A Field Experiment," Management Science, INFORMS, vol. 57(5), pages 828-842, May.
    20. Hahn, Jinyong & Todd, Petra & Van der Klaauw, Wilbert, 2001. "Identification and Estimation of Treatment Effects with a Regression-Discontinuity Design," Econometrica, Econometric Society, vol. 69(1), pages 201-209, January.
    21. Hongbin Cai & Yuyu Chen & Hanming Fang, 2009. "Observational Learning: Evidence from a Randomized Natural Field Experiment," American Economic Review, American Economic Association, vol. 99(3), pages 864-882, June.
    22. Octavian Carare, 2012. "The Impact Of Bestseller Rank On Demand: Evidence From The App Market," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(3), pages 717-742, August.
    23. Thomes, Tim Paul, 2013. "An economic analysis of online streaming music services," Information Economics and Policy, Elsevier, vol. 25(2), pages 81-91.
    24. Allcott, Hunt, 2011. "Social norms and energy conservation," Journal of Public Economics, Elsevier, vol. 95(9), pages 1082-1095.
    25. Joel Waldfogel, 2016. "Cinematic Explosion: New Products, Unpredictabilty and Realized Quality in the Digital Era," Journal of Industrial Economics, Wiley Blackwell, vol. 64(4), pages 755-772, December.
    26. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-338, May.
    27. Sanjeev Dewan & Jui Ramaprasad, 2012. "Research Note ---Music Blogging, Online Sampling, and the Long Tail," Information Systems Research, INFORMS, vol. 23(3-part-2), pages 1056-1067, September.
    28. 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, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marco Palomeque & Juan de-Lucio, 2024. "The Soundtrack of a Crisis: More Positive Music Preferences During Economic and Social Adversity," Journal of Happiness Studies, Springer, vol. 25(5), pages 1-24, June.
    2. Luis Aguiar & Zhizhong Chen, 2024. "Let that Sync in: The Effect of Music Reuse on Product Discovery," CESifo Working Paper Series 11249, CESifo.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tobias Kretschmer & Christian Peukert, 2020. "Video Killed the Radio Star? Online Music Videos and Recorded Music Sales," Information Systems Research, INFORMS, vol. 31(3), pages 776-800, September.
    2. Engström, Per & Forsell, Eskil, 2018. "Demand effects of consumers’ stated and revealed preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 43-61.
    3. Filippini, Massimo & Wekhof, Tobias, 2021. "The effect of culture on energy efficient vehicle ownership," Journal of Environmental Economics and Management, Elsevier, vol. 105(C).
    4. Helmers, Christian & Krishnan, Pramila & Patnam, Manasa, 2019. "Attention and saliency on the internet: Evidence from an online recommendation system," Journal of Economic Behavior & Organization, Elsevier, vol. 161(C), pages 216-242.
    5. Quoc-Anh Do & Yen-Teik Lee & Bang Dang Nguyen, 2016. "Directors as Connectors: The Impact of the External Networks of Directors on Firms," Working Papers hal-03393196, HAL.
    6. Anna Alberini & Markus Bareit & Massimo Filippini, 2016. "What is the Effect of Fuel Efficiency Information on Car Prices? Evidence from Switzerland," The Energy Journal, , vol. 37(3), pages 315-342, July.
    7. repec:spo:wpmain:info:hdl:2441/5q8d3q8agf8hdbs42laqdfujkb is not listed on IDEAS
    8. Quoc-Anh Do & Yen-Teik Lee & Bang Dang Nguyen, 2016. "Directors as Connectors: The Impact of the External Networks of Directors on Firms," Post-Print hal-03393196, HAL.
    9. Anna Alberini & Markus Bareit & Massimo Filippini, 2014. "Does the Swiss Car Market Reward Fuel Efficient Cars? Evidence from Hedonic Pricing Regressions, a Regression Discontinuity Design, and Matching," Working Papers 2014.16, Fondazione Eni Enrico Mattei.
    10. Louise Grogan & Fraser Summerfield, 2019. "Government Transfers, Work, and Wellbeing: Evidence from the Russian Old-Age Pension," Journal of Population Economics, Springer;European Society for Population Economics, vol. 32(4), pages 1247-1292, October.
    11. Baum-Snow, Nathaniel & Ferreira, Fernando, 2015. "Causal Inference in Urban and Regional Economics," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 3-68, Elsevier.
    12. Anna Alberini & Massimo Filippini & Markus Bareit, 2014. "Does the Swiss Car Market Reward Fuel Efficient Cars? Evidence from Hedonic Pricing Regressions, Matching and a Regression Discontinuity Design," CER-ETH Economics working paper series 14/190, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    13. repec:hal:spmain:info:hdl:2441/5q8d3q8agf8hdbs42laqdfujkb is not listed on IDEAS
    14. Eduardo Fé & Bruce Hollingsworth, 2016. "Short- and long-run estimates of the local effects of retirement on health," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 179(4), pages 1051-1067, October.
    15. Lange, Ian & Moro, Mirko & Rahman, Mohammad, 2014. "Policy Labels and Investment Decision-making," Stirling Economics Discussion Papers 2014-01, University of Stirling, Division of Economics.
    16. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    17. Essling, Christian & Koenen, Johannes & Peukert, Christian, 2017. "Competition for attention in the digital age: The case of single releases in the recorded music industry," Information Economics and Policy, Elsevier, vol. 40(C), pages 26-40.
    18. Kaniel, Ron & Parham, Robert, 2017. "WSJ Category Kings – The impact of media attention on consumer and mutual fund investment decisions," Journal of Financial Economics, Elsevier, vol. 123(2), pages 337-356.
    19. Chad D. Meyerhoefer & Muzhe Yang, 2011. "The Relationship between Food Assistance and Health: A Review of the Literature and Empirical Strategies for Identifying Program Effects," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(3), pages 304-344.
    20. Daniel A. Brent & Corey Lott & Michael Taylor & Joseph Cook & Kimberly Rollins & Shawn Stoddard, 2020. "What Causes Heterogeneous Responses to Social Comparison Messages for Water Conservation?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 77(3), pages 503-537, November.
    21. Feng, Andy & Graetz, Georg, 2017. "A question of degree: The effects of degree class on labor market outcomes," Economics of Education Review, Elsevier, vol. 61(C), pages 140-161.
    22. Dora L. Costa & Matthew E. Kahn, 2013. "Energy Conservation “Nudges” And Environmentalist Ideology: Evidence From A Randomized Residential Electricity Field Experiment," Journal of the European Economic Association, European Economic Association, vol. 11(3), pages 680-702, June.

    More about this item

    Keywords

    Streaming music; Bestseller lists; Saliency effect; Observational learning;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • O39 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:194:y:2022:i:c:p:550-567. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jebo .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.