The Grammy-winning British rock group Radiohead is letting its fans decide how much to pay for its music.
The idea isn’t new. Before his first book was published, Tom Peters gave away 12,000 copies of In Search of Excellence to friends and business associates. His publisher was furious, saying he just killed his own book, and reduced the initial run to just 15,000. Using the book’s ideas, Peters convinced the publisher to up that to 100,000 copies, and went on to sell six million.
In math the Cobweb phenomena describes economic behavior based on supply and demand, using a first-order differential equation. Will it predict consumer behavior for the value of music?
Radiohead will find out in January, when their In Rainbows album becomes available on CD.
Alas the current theory does not gracefully handle the combination of infinite supply and finite demand, nor does it allow for zero prices. To predict Radiohead’s success mathematicians will need to come up with some new economic theories, and they’ll probably start by getting rid of the cobwebs.