THE IMPACT OF BESTSELLER RANK ON DEMAND: EVIDENCE FROM THE APP MARKET

Octavian Carare

International Economic Review, 2012, vol. 53, issue 3, 717-742

Abstract: This article uses daily data on the ranking by sales of the top 100 apps sold through Apple’s App Store to provide evidence of the causal impact of today’s bestseller rank information on tomorrow’s demand. The estimates indicate that the willingness to pay of consumers is about $4.50 greater for a top ranked app than for the same unranked app. The results also indicate that the effects of bestseller status on willingness to pay decline steeply with rank at the top ranks, but remain economically significant for the apps in the first half of the top 100 list.

Date: 2012
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