Abstract
Consumption behaviors of some goods, such as books, compact disks and so on, are affected by others' consumption behaviors( externalities), which are represented by the amount of sales and their ranking positions. Although numerous attempts have been made to the externalities with micro reference groups, in particular buzz marketing, little attention has been paid to those with macro reference groups. This paper proposes a hierarchical bayesian model with the externalities. We estimate the parameters in our model, based on responses to a survey on books, which is used for conjoint analysis. By using the results of estimation, we make a simulation on book sales, taking the externalities into account. We clarify what distributions the externalities are and what attributes are affected by the externalities. In the book market, female has been more affected than male by others' behaviors. In addition, the externalities have more effects on older people. We illustrate that the number of total sales is higher when externality is present than when absent in our model, using numerical examples.
