nep-cul New Economics Papers
on Cultural Economics
Issue of 2017‒09‒17
two papers chosen by
Roberto Zanola
Università degli Studi del Piemonte Orientale

  1. Vertical Foreclosure with Product Choice and Allocation: Evidence from the Movie Industry By Jaedo Choi; Yun Jeong Choi; Minki Kim
  2. Strategic microscheduling of movies By Dürr, Niklas S.; Engelstätter, Benjamin; Ward, Michael R.

  1. By: Jaedo Choi (University of Michigan, Ann Arbor); Yun Jeong Choi (Yonsei University); Minki Kim (University of California, San Diego)
    Abstract: We investigate a vertically integrated theater's contract and screen allocation decisions in the movie industry characterized by quality unpredictability, price uni- formity, and revenue-sharing contracts. Based on a simple theoretical model that describes the decisions of theaters and movie distributors, we derive two mecha- nisms of foreclosure behaviors: selection and allocation foreclosure. Our empirical results suggest that integrated theaters not only impose a higher quality standard for movies from independent distributors at contracts but also screen their aliated movies more even after contract. Vertically integrated theaters' favoritism toward its aliated movies are more pronounced at company-owned theaters than franchised theaters. Further, we also nd integrated theaters' favorable treats for their rival movies compared to independent movies as well as non-linearity of the foreclosure e ects across movie quality and seasonality.
    Keywords: Endogenous Product Characteristics, Movie Industry, Quality Unpre- dictability, Revenue-Sharing Contract, Vertical Integration
    JEL: L13 L22 L40 L82
    Date: 2017–09
  2. By: Dürr, Niklas S.; Engelstätter, Benjamin; Ward, Michael R.
    Abstract: We investigate how competition in product niches affects the ultimate timing of product release for experience goods using data on motion pictures in the United States. We identify product niches that movies occupy along three different product dimensions: common actor, common director, and common genre. We estimate the drivers for a motion picture's weekly sales based on the variation in the level of competition in these particular niches over time. We show that release date of motion pictures are more likely rescheduled when there is more competition during the initially proposed release week. Next, we find that competition from movies by the same director or within the same movie genre decrease motion picture's box office revenue most. Finally, we compare a movie's actual sales to estimated sales at the originally planned release date. Rescheduled movies generate about $6 million more revenue than they would have at their originally proposed release date.
    Keywords: Non-price competition,Niche competition,Strategic timing of entry,Movie market
    JEL: D22 L21 L82 M31
    Date: 2017

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