Using the same statistical physics methods used to study complex systems like earthquakes and financial markets, UCLA physics professor Didier Sornette and his colleagues have set out to explain the book-ranking behavior.

They used the Epidemics-Type Aftershock Sequence model, which draws on statistical techniques for studying how diseases spread through populations in order to model earthquake aftershocks.

Information about a book travels through the network of potential buyers in two possible fashions: exogenous and endogenous.

Exogenous shocks come from sources outside the system they affect, like billboards or newspaper articles; endogenous shocks are made up of very small exogenous shocks that happen in a coordinated fashion, like word-of-mouth recommendations.

The model predicts how sales will decline after they peak according to how the peak occurred. The decline after an exogenous shock is fairly steep, while the decay after an endogenous shock is more gradual. The model was 84 percent correct in the researchers tests.

Book publishing houses and marketing firms could use the method to quantify how books will sell post-peak, and to time the market, according to the researchers.

Using the method to study complex non-physical systems like markets could, in turn, help scientists understand complicated life processes whose divisions between exogenous and endogenous shocks are difficult to distinguish, according to the researchers.

The method could be used in practical applications within six months to a year, said Gilbert.

More here.