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Demand Shifts and Changes in Competition: Evidence from the Movie Theatre Industry

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  • Ricard Gil

Abstract

In this paper, I empirically examine how demand shifts affect firm behaviour. In particular, I study how competitive behaviour between firms changes across different demand states. For this purpose, I use price and concentration data from the Spanish movie theatre industry in 1995 and 2000. The evidence suggests that demand shifts change the competitive nature of the industry under study, and that this change differs across different demand shifts. Firms deviate less from tacit collusive behaviour when gains of deviation are smaller.

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File URL: http://www.tandfonline.com/10.1080/13571510600961437
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal International Journal of the Economics of Business.

Volume (Year): 13 (2006)
Issue (Month): 3 ()
Pages: 407-428

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Handle: RePEc:taf:ijecbs:v:13:y:2006:i:3:p:407-428

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Related research

Keywords: Competition; Conjectural Variations; Movie Theatres;

References

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  1. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
  2. Corts, Kenneth S., 1998. "Conduct parameters and the measurement of market power," Journal of Econometrics, Elsevier, vol. 88(2), pages 227-250, November.
  3. Rosen, Sherwin & Rosenfield, Andrew M, 1997. "Ticket Pricing," Journal of Law and Economics, University of Chicago Press, vol. 40(2), pages 351-76, October.
  4. Edward J Green & Robert H Porter, 1997. "Noncooperative Collusion Under Imperfect Price Information," Levine's Working Paper Archive 1147, David K. Levine.
  5. Bresnahan, Timothy F & Reiss, Peter C, 1991. "Entry and Competition in Concentrated Markets," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 977-1009, October.
  6. Bresnahan, Timothy F & Reiss, Peter C, 1990. "Entry in Monopoly Markets," Review of Economic Studies, Wiley Blackwell, vol. 57(4), pages 531-53, October.
  7. De Vany, Arthur & Walls, W David, 1996. "Bose-Einstein Dynamics and Adaptive Contracting in the Motion Picture Industry," Economic Journal, Royal Economic Society, vol. 106(439), pages 1493-1514, November.
  8. Rotemberg, Julio J & Saloner, Garth, 1986. "A Supergame-Theoretic Model of Price Wars during Booms," American Economic Review, American Economic Association, vol. 76(3), pages 390-407, June.
  9. Timothy F. Bresnahan & Peter C. Reiss, 1987. "Do Entry Conditions Vary across Markets?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3), pages 833-882.
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