Citation
Goodbye Pareto principle, hello long tail: The effect of search costs on the concentration of product sales
TL;DR
Lower search costs reduce sales concentration
Academic analysis of how reduced search costs affect sales concentration in online markets. Provides empirical evidence on long tail dynamics showing that lower search costs shift demand toward niche products.
Quantifies the mechanism by which digital discovery tools enable long tail profitability through better matching of consumers to niche products.
Key Findings from Brynjolfsson et al. (2011)
- Lower search costs reduce sales concentration
- Internet channels show flatter sales distributions than catalogs
- Recommendation systems shift demand to tail
- Quantifies long tail effect of search technology