Advanced Search
MyIDEAS: Login to save this article or follow this journal

Asset Specificity and Long-Term Contracts: The Case of the Motion-Pictures Industry

Contents:

Author Info

  • Darlene C. Chisholm

    (Lehigh University)

Registered author(s):

    Abstract

    The proliferation of long-term contractual arrangements between actors and studios in the U.S. motion-pictures industry during the Age of the Studio (1929-48) is analyzed. Asset specificity and transaction-cost minimization explain the optimality of long-term over short-term agreements. In particular, the following historical factors prove to have been pivotal in increasing the degree of relationship-specific investment and decreasing the costs of transacting: the high degree of both industrial concentration and vertical integration; the prevalence of a star-promotion system; the U.S. v. Paramount antitrust litigation; and the rise of television as a substitute form of entertainment.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://college.holycross.edu/RePEc/eej/Archive/Volume19/V19N2P143_155.pdf
    Download Restriction: no

    Bibliographic Info

    Article provided by Eastern Economic Association in its journal Eastern Economic Journal.

    Volume (Year): 19 (1993)
    Issue (Month): 2 (Spring)
    Pages: 143-155

    as in new window
    Handle: RePEc:eej:eeconj:v:19:y:1993:i:2:p:143-155

    Contact details of provider:
    Postal: c/o Dr. Alexandre Olbrecht, The Anisfield School of Business 205, Ramapo College, 505 Ramapo Valley Road, Ramapo, New Jersey 07430, USA
    Phone: (201) 684-7346
    Email:
    Web page: http://www.ramapo.edu/eea/journal.html
    More information through EDIRC

    Related research

    Keywords: Contracts; Motion Picture; Transactions;

    Find related papers by JEL classification:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Crocker, K.J. & Masten, S.E., 1988. "Pretia Ex Machina?: Prices And Process In Long-Term Contracts," Papers, Pennsylvania State - Department of Economics 10-88-2, Pennsylvania State - Department of Economics.
    2. Crawford, Vincent P, 1988. "Long-term Relationships Governed by Short-term Contracts," American Economic Review, American Economic Association, American Economic Association, vol. 78(3), pages 485-99, June.
    3. Paul Joskow, 1984. "Vertical Integration and Long Term Contracts: The Case of Coal Burning Electric Generating Plants," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 361, Massachusetts Institute of Technology (MIT), Department of Economics.
    4. Riordan, Michael H. & Williamson, Oliver E., 1985. "Asset specificity and economic organization," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 3(4), pages 365-378, December.
    5. Armen A. Alchian & Harold Demsetz, 1971. "Production, Information Costs and Economic Organizations," UCLA Economics Working Papers, UCLA Department of Economics 10A, UCLA Department of Economics.
    6. Cheung, Steven N S, 1983. "The Contractual Nature of the Firm," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 26(1), pages 1-21, April.
    7. Masten, Scott E & Crocker, Keith J, 1985. "Efficient Adaptation in Long-term Contracts: Take-or-Pay Provisions for Natural Gas," American Economic Review, American Economic Association, American Economic Association, vol. 75(5), pages 1083-93, December.
    8. Mulherin, J Harold, 1986. "Complexity in Long-term Contracts: An Analysis of Natural Gas Contractual Provisions," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 2(1), pages 105-17, Spring.
    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 in new window

    Cited by:
    1. Ricard Gil & Pablo T. Spiller, 2007. "The Organizational Implications of Creativity: The US Film Industry in Mid-XXth Century," NBER Working Papers 13253, National Bureau of Economic Research, Inc.
    2. Darlene Chisholm, 2004. "Two-Part Share Contracts, Risk, and the Life Cycle of Stars: Some Empirical Results from Motion Picture Contracts," Journal of Cultural Economics, Springer, Springer, vol. 28(1), pages 37-56, February.
    3. 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, Springer, vol. 34(2), pages 131-145, May.
    4. W. Walls, 2010. "Superstars and heavy tails in recorded entertainment: empirical analysis of the market for DVDs," Journal of Cultural Economics, Springer, Springer, vol. 34(4), pages 261-279, November.
    5. Michael Pokorny & John Sedgwick, 2001. "Stardom and the Profitability of Film Making: Warner Bros. in the 1930s," Journal of Cultural Economics, Springer, Springer, vol. 25(3), pages 157-184, August.
    6. Ch'ng, Kean Siang, 2007. "Evolutionary Concept, Genetic Algorithm and Exhibition Contract in Movie Industry," MPRA Paper 5138, University Library of Munich, Germany.
    7. Cameron, Samuel & Collins, Alan, 1997. "Transaction costs and partnerships: The case of rock bands," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 32(2), pages 171-183, February.
    8. 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, College of Business, and College of Finance, Feng Chia University, Taichung, Taiwan, College of Business, and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 8(2), pages 115-131, August.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:eej:eeconj:v:19:y:1993:i:2:p:143-155. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson, College of the Holy Cross).

    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 references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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