Recommended for you: The effect of word of mouth on sales concentrationAndres Hervas-Drane International Journal of Research in Marketing, 2015, vol. 32, issue 2, 207-218 Abstract: I examine the role of word of mouth in consumer's product discovery process and its implications for the firm. A monopolist supplies an assortment of horizontally differentiated products and consumers search for a product that matches their taste by sampling products from the assortment or by seeking product recommendations from other consumers. I analyze the underlying consumer interactions that lead to the emergence of word of mouth, examine the optimal pricing and assortment strategy of the firm, and explain the impact of word of mouth on the concentration of sales within the assortment. The model provides a rationale for the long tail phenomenon, explains recent empirical findings in online retail, and is well suited for product categories such as music, film, books, and video game entertainment. Keywords: Search; Product discovery; Product recommendations; Recommender systems; Long tail (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ijrema:v:32:y:2015:i:2:p:207-218 DOI: 10.1016/j.ijresmar.2015.02.005 Access Statistics for this article International Journal of Research in Marketing is currently edited by Roland Rust More articles in International Journal of Research in Marketing from Elsevier |
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