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Diderot's rule

Beck, Jonathan (2009): Diderot's rule.

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Abstract

The odds of success in creative industries like the book, music or movie industry are often said to be particularly low. A 1763 rule by Denis Diderot, for example, says that only one out of ten published books is a commercial success. Yet, representative evidence on new-product success rates and their development over time is scarce. Furthermore, the standard approach to use sales as success measure can be misleading from the producer's perspective. This paper presents a novel approach to empirically identify producer success by incorporating the standard terms of contract between creator and producer into a parsimonious model of information diffusion (word-of-mouth). The model is applied to a random sample of novels. Parametric and semiparametric estimates imply a success rate between 10 and 15\% for this market. Set against Diderot's rule, these results suggest that new-product success in the book industry has been fairly constant over time.

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