MIS Quarterly, 2014, Volume 38,
Issue 4, Page 1057-1078.
Recent papers have shown that, in contrast to the long tail theory, movie sales remain concentrated in a small number of hits. These papers have argued that concentrated sales can be explained, in part, by heterogeneity in quality and increasing returns from social effects. Our research analyzes an additional explanation: how incomplete information may skew sales patterns. We use the movie broadcast on pay-cable channels as an exogenous shock to the availability of information, and analyze how this shock changes the resulting sales distribution.
Keywords: Incomplete information; product discovery; multichannel distribution; movie industry; cannibalization; movie broadcast; DVD sales and rental; long tail; sales distribution