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Demand Shifts and Second Degree Price discimination - the Impact of DVDs on the Motion Pictures Industry

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Author Info
Arie Beresteanu

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Abstract

This paper applies models of price discrimination to the motion picture industry. Movies are durable goods with no resale market. Therefore, price discrimination using time can be used. The distributors release the movie in two different periods: theaters and video. The first is a high quality product and the second is a low quality product issued in a later point in time. The quality gap between the two versions of the product has shrunk as the DVD technology penetrated the market. This paper compares two years: 1995 and 2000. Initial results show a difference between the two years. The most evident one is a shrinkage of the time between the theatrical release and the video release

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Paper provided by Econometric Society in its series Econometric Society 2004 North American Winter Meetings with number 609.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:nawm04:609

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Related research
Keywords: price discrimination; motion picture industry; time consistency;

Find related papers by JEL classification:
L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies

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  1. Dana, James D, Jr, 2001. "Competition in Price and Availability When Availability is Unobservable," RAND Journal of Economics, The RAND Corporation, vol. 32(3), pages 497-513, Autumn.
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  2. Dana, James D, Jr & Spier, Kathryn E, 2001. "Revenue Sharing and Vertical Control in the Video Rental Industry," Journal of Industrial Economics, Blackwell Publishing, vol. 49(3), pages 223-45, September. [Downloadable!] (restricted)
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