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

This article uses daily data on the ranking by sales of the top 100 apps sold through Apples App Store to provide evidence of the causal impact of todays bestseller rank information on tomorrows 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.