A problem with the Long Tail (Although an amazing number of things are powerlaws, a lot of things aren’t. How can you tell the difference?) (Read the text in the notes panel at the bottom for narration)

A powerlaw

Shown another way

WTF?

The Missing Market

Source: Morris Rosenthal

The problem

Examples of phenomena that follow powerlaw distributions Species distribution among plants Square footage of Alaskan Inuit homes Forest fires, by size Cities, by population Death toll in wars Earthquakes Word use Number of papers published by scientists

Species distribution among plants

Square footage of Alaskan Inuit homes

Forest fires, by size

Cities, by population

Death toll in wars

Earthquakes

Word use

Number of papers published by scientists

Examples of phenomena that follow lognormal distributions Concentration of elements in the earth's crust Latent periods of infectious diseases Survival times after cancer diagnosis Distribution of chemicals in the environment (including pollution) Species distribution among moths and diatoms Crystals in ice cream Length of words in spoken conversation

Concentration of elements in the earth's crust

Latent periods of infectious diseases

Survival times after cancer diagnosis

Distribution of chemicals in the environment (including pollution)

Species distribution among moths and diatoms

Crystals in ice cream

Length of words in spoken conversation

What’s the difference? Powerlaws : created by “preferential attachment” in scale-free networks.

Powerlaws : created by “preferential attachment” in scale-free networks.

Lognormal distributions : created by "proportionate effects" (like growing by a proportion of your weight).

Lognormal distributions : created by "proportionate effects" (like growing by a proportion of your weight).

Question Assuming it all comes down to network effects, how can you predict whether the “natural shape” (free of bottlenecks and other scarcity distortions) is a powerlaw or a lognormal distribution?

Assuming it all comes down to network effects, how can you predict whether the “natural shape” (free of bottlenecks and other scarcity distortions) is a powerlaw or a lognormal distribution?