Auctions with Constrained Information: Blind Bidding for Motion Pictures
AbstractToward explaining why movie exhibitors have sought legislation requiring distributors to trade-screen films before soliciting bids, a simulation of a Nash equilibrium in an auction suggests that without previews bidders may suffer losses i n expected utility. This supports the hypothesis that risk aversion a nd competition render exhibitors unable to reduce their bids enough t o compensate fully for the dearth of information. An error-components model is used to analyze a unique industry dataset. The results conf irm that a component of the bid is lower (raising mean return), while the variance of return is greater for blindly-licensed films. Copyright 1988 by MIT Press.
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Bibliographic InfoArticle provided by MIT Press in its journal Review of Economics & Statistics.
Volume (Year): 70 (1988)
Issue (Month): 2 (May)
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- Arthur De Vany & W. Walls, 1999. "Uncertainty in the Movie Industry: Does Star Power Reduce the Terror of the Box Office?," Journal of Cultural Economics, Springer, vol. 23(4), pages 285-318, November.
- Moul, Charles C., 2008. "Retailer entry conditions and wholesaler conduct: The theatrical distribution of motion pictures," International Journal of Industrial Organization, Elsevier, vol. 26(4), pages 966-983, July.
- W. Walls, 2010. "Superstars and heavy tails in recorded entertainment: empirical analysis of the market for DVDs," Journal of Cultural Economics, Springer, vol. 34(4), pages 261-279, November.
- 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, vol. 8(2), pages 115-131, August.
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