The “long tail” theory was celebrated by BusinessWeek as the biggest idea of the year 2004, soon after the book The Long Tail by Chris Anderson was published. The long tail theory calls for applying a low-budget strategy—producing a (relatively) large number of products with (relatively) low investment levels. However, some other cultural industries may tell a different story. The concentration of the most popular titles in the video game industry is growing, a phenomenon known as the blockbuster phenomenon. This phenomenon suggests that firms may adopt a high-budget strategy—producing a (relatively) small number of products with (relatively) high investment levels. In “Market Entry and Competition Under Network Effects,” Y. Feng and M. Hu analytically study the impact of a network effect on entry decisions and investment strategies (i.e., the high-budget versus low-budget strategies) adopted by competing firms based on which they further provide a theory that links the ex post sales volume concentration with the ex ante product variety in a market under network effects.

Amazon and Apple, which sell tablet devices, have adopted different implicit information policies and developed distinct “reputations” about their tablets’ sales volume release. With Amazon, “even a number as basic, and presumably impressive, as how many Kindle e-readers the company sells is never released.” With Apple, iPhone and iPad sales numbers are always released, even if they are disappointing. In the paper “Information Disclosure and Pricing Policies for Sales of Network Goods,” the authors study the sales information release policy, disclosure versus nondisclosure, for selling network goods subject to market size uncertainty. They identify two countervailing effects, a prodisclosure “Matthew effect” and an antidisclosure saturation effect, that drive the firms’ sales information disclosure policies. In addition, the authors also study the situation where the firm can decide on an all-or-nothing information disclosure policy together with endogenized prices, including state-independent pricing, contingent preannounced pricing, and contingent pricing without commitment.