Newly released music by a certain artist is never assessed in isolation by the audiences, who tend to compare it with the previous musical catalogue of the corresponding artist. Through a repeated interaction with the artist's music, the audiences build their own expectations about the future...

We explore the consequence of quality unpredictability for the welfare benefit of new products, using recent developments in recorded music as our context. Digitization has expanded consumption opportunities by giving consumers access to the "long tail" of existing products, rather than simply...