Bestseller Lists and the Economics of Product Discovery

Abstract

Innovations in information technology have increased the prevalence of markets with large numbers of products. Each week, for example, an average of over 800 books are published, and an average of over 1,100 iOS apps are released in Apple's App Store. This review summarizes existing research about how consumers learn about new products in such markets, focusing on mechanisms like bestseller lists and user-generated product reviews. In addition to reviewing research findings about how these mechanisms directly influence sales, this article also discusses how these mechanisms affect broader market outcomes, such as the shape of the success distribution and the likelihood that good products are discovered.