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When to Exit a Product: Evidence from the U. S. Motion-Picture Exhibition Market

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  • Darlene C. Chisholm
  • George Norman

Abstract

When is it optimal for a multi-product firm to exit a product? We analyze strategic product exit using data on motion-pictures exhibition choices in a major metropolitan first-run market to estimate the survivor function for films at a given theatre. This analysis indicates that a film’s survival at a particular theatre is affected by intra-firm relative performance and interfirm competitive pressures. We find that theatres within chains avoid business stealing. Preliminary analysis further suggests that theatres compete for market share with neighboring theatres by increasing the time to exit when the competing theatre is owned by a different chain.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/000282806777212440
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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 96 (2006)
Issue (Month): 2 (May)
Pages: 57-61

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Handle: RePEc:aea:aecrev:v:96:y:2006:i:2:p:57-61

Note: DOI: 10.1257/000282806777212440
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References

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  11. Darlene Chisholm & Margaret McMillan & George Norman, 2010. "Product differentiation and film-programming choice: do first-run movie theatres show the same films?," Journal of Cultural Economics, Springer, vol. 34(2), pages 131-145, May.
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  18. Antoni Calvo-Armengol & Yannis M. Ioannides, 2005. "Social Networks in Labor Markets," Discussion Papers Series, Department of Economics, Tufts University 0517, Department of Economics, Tufts University.
  19. Jay Shimshack, 2004. "Are Mercury Advisories Effective? Inofrmation, Education, and Fish Consumption," Discussion Papers Series, Department of Economics, Tufts University 0423, Department of Economics, Tufts University.
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Cited by:
  1. Ioannides, Yannis M. & Soetevent, Adriaan R., 2007. "Social networking and individual outcomes beyond the mean field case," Journal of Economic Behavior & Organization, Elsevier, vol. 64(3-4), pages 369-390.
  2. Darlene C. Chisolm & Margaret McMillan & George Norman, 2007. "Product Differentiation and Film Programming Choice: Do First-Run Movie Theatres Show the Same Films?," Discussion Papers Series, Department of Economics, Tufts University 0713, Department of Economics, Tufts University.
  3. Gilbert Metcalf & Jongsang Park, 2007. "A comment on the role of prices for excludable public goods," International Tax and Public Finance, Springer, vol. 14(6), pages 685-698, December.

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