IDEAS home Printed from https://ideas.repec.org/a/kap/atlecj/v37y2009i1p73-85.html
   My bibliography  Save this article

A Puzzle or a Choice: Uniform Pricing for Motion Pictures at the Box

Author

Listed:
  • Chien-Ping Chen

Abstract

Consumer differentiated preferences over movies make the uniform pricing regime at the box office a puzzle in the motion picture business. This paper explores the nature of price rigidity at the current uniform price. It concludes that the high profit mark-up from concession sales helps to retain uniform pricing as the optimal choice for exhibitors, without distributors’ condemned intervention. Unless many successful event movies are expected, tiered pricing over regular and event movies will not benefit either exhibitors or distributors. The criteria for exhibitors to favor tiered pricing and the distributors’ choices to eliminate the agency problem are also developed. Copyright International Atlantic Economic Society 2009

Suggested Citation

  • Chien-Ping Chen, 2009. "A Puzzle or a Choice: Uniform Pricing for Motion Pictures at the Box," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 37(1), pages 73-85, March.
    • Handle: RePEc:kap:atlecj:v:37:y:2009:i:1:p:73-85
    DOI: 10.1007/s11293-008-9153-7
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11293-008-9153-7
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11293-008-9153-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Orbach, Barak Y. & Einav, Liran, 2007. "Uniform prices for differentiated goods: The case of the movie-theater industry," International Review of Law and Economics, Elsevier, vol. 27(2), pages 129-153.
    2. Daniel R. Marburger, 1997. "Optimal ticket pricing for performance goods," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 18(5), pages 375-381.
    3. W. Walls, 2005. "Modeling Movie Success When ‘Nobody Knows Anything’: Conditional Stable-Distribution Analysis Of Film Returns," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 29(3), pages 177-190, August.
    4. De Vany, Arthur & Lee, Cassey, 2001. "Quality signals in information cascades and the dynamics of the distribution of motion picture box office revenues," Journal of Economic Dynamics and Control, Elsevier, vol. 25(3-4), pages 593-614, March.
    5. Paul M. Sweezy, 1939. "Demand Under Conditions of Oligopoly," Journal of Political Economy, University of Chicago Press, vol. 47(4), pages 568-568.
    6. Cheung, Steven N S, 1977. "Why Are Better Seats "Underpriced?"," Economic Inquiry, Western Economic Association International, vol. 15(4), pages 513-522, October.
    7. Locay, Luis & Rodriguez, Alvaro, 1992. "Price Discrimination in Competitive Markets," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 954-965, October.
    8. Barak Orbach, "undated". "Antitrust and Pricing in the Motion Picture Industry," University of Michigan John M. Olin Center for Law & Economics Working Paper Series umichlwps-1009, University of Michigan John M. Olin Center for Law & Economics.
    9. Whitney, James D, 1988. "Winning Games versus Winning Championships: The Economics of Fan Interest and Team Performance," Economic Inquiry, Western Economic Association International, vol. 26(4), pages 703-724, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Böhme Enrico & Müller Christopher, 2011. "Searching for the Concentration-Price Effect in the German Movie Theater Industry," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 231(4), pages 479-493, August.
    2. Chung, Hoe Sang, 2015. "A Note On Uniform Pricing In The Motion-Picture Industry," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 56(2), pages 231-242, December.
    3. Catherine Gendron-Saulnier & Marc Santugini, 2013. "Noisy Learning and Price Discrimination: Implications for Information Dissemination and Profits," Cahiers de recherche 1335, CIRPEE.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Richardson, Martin & Stähler, Frank, 2016. "On the “uniform pricing puzzle” in recorded music," Information Economics and Policy, Elsevier, vol. 34(C), pages 58-66.
    2. Drevs, Florian, 2013. "The Challenge of the Unknown – The Effect of Pay-What-You-Want on the Market Success of Publicly Subsidized Films," ZögU - Zeitschrift für öffentliche und gemeinwirtschaftliche Unternehmen, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 36(4), pages 255-270.
    3. Ricard Gil, 2015. "Does Vertical Integration Decrease Prices? Evidence from the Paramount Antitrust Case of 1948," American Economic Journal: Economic Policy, American Economic Association, vol. 7(2), pages 162-191, May.
    4. Arthur Vany & W. Walls, 2007. "Estimating the Effects of Movie Piracy on Box-office Revenue," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 30(4), pages 291-301, June.
    5. Terrence August & Duy Dao & Hyoduk Shin, 2015. "Optimal Timing of Sequential Distribution: The Impact of Congestion Externalities and Day-and-Date Strategies," Marketing Science, INFORMS, vol. 34(5), pages 755-774, September.
    6. Knut Løyland & Vidar Ringstad, 2009. "On the Price and Income Sensitivity of the Demand for Sports: Has Linder’s Disease Become More Serious?," Journal of Sports Economics, , vol. 10(6), pages 601-618, December.
    7. W. D. Walls, 2009. "The Market for Motion Pictures in Thailand: Rank, Revenue, and Survival at the Box Office," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 8(2), pages 115-131, August.
    8. Jordi McKenzie, 2010. "How do theatrical box office revenues affect DVD retail sales? Australian empirical evidence," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 34(3), pages 159-179, August.
    9. Ricard Gil & Wesley Hartmann, 2007. "The Role and Determinants of Concession Sales in Movie Theaters: Evidence from the Spanish Exhibition Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 30(4), pages 325-347, June.
    10. Ricard Gil & Wesley R. Hartmann, 2009. "Empirical Analysis of Metering Price Discrimination: Evidence from Concession Sales at Movie Theaters," Marketing Science, INFORMS, vol. 28(6), pages 1046-1062, 11-12.
    11. Orbach, Barak Y. & Einav, Liran, 2007. "Uniform prices for differentiated goods: The case of the movie-theater industry," International Review of Law and Economics, Elsevier, vol. 27(2), pages 129-153.
    12. Ira Horowitz, 2007. "If you play well they will come-and vice versa: bidirectional causality in major-league baseball," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 93-105.
    13. Timothy E. Zimmer & Allison Snyder & Lawrence Bukenya, 2021. "American Baseball Fans Do Not Influence Game Outcomes," Economics Bulletin, AccessEcon, vol. 41(2), pages 741-750.
    14. Young Hoon Lee, 2009. "The Impact of Postseason Restructuring on the Competitive Balance and Fan Demand in Major League Baseball," Journal of Sports Economics, , vol. 10(3), pages 219-235, June.
    15. W. D. Walls, 2005. "Modelling heavy tails and skewness in film returns," Applied Financial Economics, Taylor & Francis Journals, vol. 15(17), pages 1181-1188.
    16. Jana Fibírová, 2008. "The Competitive Advantage of Management Accounting [Konkurenční výhoda manažerského účetnictví]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2008(2), pages 78-90.
    17. McKenzie, Jordi, 2013. "Predicting box office with and without markets: Do internet users know anything?," Information Economics and Policy, Elsevier, vol. 25(2), pages 70-80.
    18. A. Yeşim Orhun & Sriram Venkataraman & Pradeep K. Chintagunta, 2016. "Impact of Competition on Product Decisions: Movie Choices of Exhibitors," Marketing Science, INFORMS, vol. 35(1), pages 73-92, January.
    19. Sivakumar, K. & Weigand, Robert E., 1997. "Model of retail price match guarantees," Journal of Business Research, Elsevier, vol. 39(3), pages 241-255, July.
    20. Gaenssle Sophia & Budzinski Oliver & Astakhova Daria, 2018. "Conquering the Box Office: Factors Influencing Success of International Movies in Russia," Review of Network Economics, De Gruyter, vol. 17(4), pages 245-266, December.

    More about this item

    Keywords

    Entertainment; Pricing; Agency problem; D21; L60;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:atlecj:v:37:y:2009:i:1:p:73-85. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.