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Price effects of multimarket contact among movie chains in small US metropolitan areas

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  • Feinberg, Robert M.

Abstract

Movie theater chains are ubiquitous in major metropolitan areas of the US, with generally two or more of these large chains present. However in smaller metropolitan areas, we see far more variation in the role of these chains. This allows for an opportunity to see whether multimarket contact (MMC) among these firms has an impact on movie pricing in these smaller markets. In this paper, data on movie pricing, market structure, and income and population characteristics are obtained for 79 small metropolitan areas–those with under 250,000 people–which are not part of larger “consolidated” metropolitan areas. A crude measure of MMC is found to indeed be related to price increases in the smallest of these markets.

Suggested Citation

  • Feinberg, Robert M., 2014. "Price effects of multimarket contact among movie chains in small US metropolitan areas," Economics Letters, Elsevier, vol. 123(1), pages 6-8.
    • Handle: RePEc:eee:ecolet:v:123:y:2014:i:1:p:6-8
    DOI: 10.1016/j.econlet.2014.01.012
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    Cited by:

    1. Balaguer, Jacint & Ripollés, Jordi, 2021. "Does multimarket contact affect prices in the retail fuel industry? First empirical evidence," Energy Economics, Elsevier, vol. 93(C).
    2. Donggeun Kim & Myongjin Kim & Kerry Tan, 2021. "Tacit collusion and price dispersion in the presence of Southwest Airlines," Southern Economic Journal, John Wiley & Sons, vol. 88(1), pages 3-32, July.
    3. Beomjoon Shim & Ahmed Khwaja, 2017. "The Collusive Effect of Multimarket Contact on Prices: Evidence from Retail Lumber Markets," 2017 Meeting Papers 593, Society for Economic Dynamics.

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    More about this item

    Keywords

    Multimarket contact; Small metropolitan areas; Movie theaters;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L8 - Industrial Organization - - Industry Studies: Services

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