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Predicting box office with and without markets: Do internet users know anything?

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  • McKenzie, Jordi

Abstract

This study investigates and compares predictions of opening weekend box office revenue from an online prediction game, the Derby, and an online prediction market, the Hollywood Stock Exchange (HSX), using a sample of 141 films released in 2007. Overall, both mechanisms provide accurate predictions of box office outcomes but tend to over-predict small-earning films and under-predict large-earning films. This bias is present across a number of sub-samples disaggregated by film-specific variables. The bias is consistently greater in the Derby game, suggesting that the market mechanism is superior to the non-market mechanism. There is also evidence that larger budget films, sequels and films featuring stars are predicted more accurately in both settings, and that individual-level predictions improve as films spend more time at the box office and as players gain experience.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:iepoli:v:25:y:2013:i:2:p:70-80
    DOI: 10.1016/j.infoecopol.2013.05.001
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    References listed on IDEAS

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    Cited by:

    1. David Court & Benjamin Gillen & Jordi McKenzie & Charles R. Plott, 2018. "Two information aggregation mechanisms for predicting the opening weekend box office revenues of films: Boxoffice Prophecy and Guess of Guesses," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(1), pages 25-54, January.
    2. Ronny Behrens & Natasha Zhang Foutz & Michael Franklin & Jannis Funk & Fernanda Gutierrez-Navratil & Julian Hofmann & Ulrike Leibfried, 2021. "Leveraging analytics to produce compelling and profitable film content," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 45(2), pages 171-211, June.
    3. Jordi McKenzie, 2023. "The economics of movies (revisited): A survey of recent literature," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 480-525, April.
    4. Mun, Mak Kit & Chong, Choo Wei, 2018. "Forecasting Movie Demand Using Total and Split Exponential Smoothing," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 52(2), pages 81-94.

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    More about this item

    Keywords

    Motion pictures; Prediction mechanisms; Prediction markets; Information aggregation; Forecasting;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • L8 - Industrial Organization - - Industry Studies: Services

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