Only a “Longish” Tail

37 Pages Posted: 18 Feb 2021

See all articles by Stan J. Liebowitz

Stan J. Liebowitz

University of Texas at Dallas - School of Management - Department of Finance & Managerial Economics

Michael R. Ward

University of Texas at Arlington - College of Business Administration - Department of Economics; ZEW, Mannheim

Alejandro Zentner

The University of Texas at Dallas - Naveen Jindal School of Management

Date Written: January 21, 2021

Abstract

The long tail hypothesis claims that increased Internet usage will enhance the purchase of obscure items so that, in aggregate, these obscure items will become an important, perhaps primary portion of the market. We test this hypothesis with two analyses. First, using unusually rich data on book sales, we examine the share of niche titles as Internet retailing grew from obscurity to ubiquity. Using relative measurements of concentration, as has been common, provides results contrary to the hypothesis. But we also conclude that it is inappropriate to use relative measures of concentration with these data. Using absolute measures of concentration provides results consistent with the hypothesis’ sign but not with the magnitude. Second, we use the 2011 bankruptcy of the Borders bookstore chain and the resulting sudden shutdown of all its store locations, as a natural experiment. This analysis finds a shift in sales away from the top successful titles. But the major beneficiaries are not the most obscure titles but instead some quite successful titles and some mildly obscure titles. The former is contrary to the hypothesis, and the latter supports the direction but not the size of the hypothesis. Both analyses support, at best, an enfeebled version of the long tail where the share of relatively obscure titles changes from one unimportant small value to a somewhat greater but still unimportant value. Thus, the use in the title of “longish” as a diminutive form of “long.”

Keywords: long tail, internet commerce, books, entertainment, concentration, gini coefficient

JEL Classification: O3, L82, Z11

Suggested Citation

Liebowitz, Stan J. and Ward, Michael Robert and Zentner, Alejandro, Only a “Longish” Tail (January 21, 2021). Available at SSRN: https://ssrn.com/abstract=3770454 or http://dx.doi.org/10.2139/ssrn.3770454

Stan J. Liebowitz (Contact Author)

University of Texas at Dallas - School of Management - Department of Finance & Managerial Economics ( email )

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HOME PAGE: http://www.utdallas.edu/~liebowit/

Michael Robert Ward

University of Texas at Arlington - College of Business Administration - Department of Economics ( email )

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ZEW, Mannheim ( email )

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Germany

Alejandro Zentner

The University of Texas at Dallas - Naveen Jindal School of Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States

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