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Product Line Rivalry: How Box Office Revenue Cycles Influence Movie Exhibition Variety

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Author Info
Darlene C. Chisholm
George Norman
Abstract

We analyze how product line rivalry by multi-product oligopolists is affected by market product substitutability. We show that the width and degree of overlap in competing lines is determined by the tension between two effects: the drive to “be where the demand and the desire to weaken competition and intra-firm product cannibalization. Product shown to be wider and more overlapped in large markets and when product substitutability weak. We provide econometric support for our main hypotheses using data on weekly programming choices by first-run movie theatres in a large US metropolitan market.

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Paper provided by Department of Economics, Tufts University in its series Discussion Papers Series, Department of Economics, Tufts University with number 0709.

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Date of creation: 2007
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Handle: RePEc:tuf:tuftec:0709

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Keywords: Product line rivalry market size product substitutability movie exhibition

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Find related papers by JEL classification:
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior
D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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    Other versions:
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  4. Eaton, B Curtis & Lipsey, Richard G, 1979. "The Theory of Market Pre-emption: The Persistence of Excess Capacity and Monopoly in Growing Spatial Markets," Economica, London School of Economics and Political Science, vol. 46(182), pages 149-58, May. [Downloadable!] (restricted)
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  8. Manez, J.A. & Waterson, M., 2001. "Multiproduct Firms and Product Differentiation: a Survey," The Warwick Economics Research Paper Series (TWERPS) 594, University of Warwick, Department of Economics. [Downloadable!]
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  10. Darlene C. Chisholm & Margaret S. McMillan & George Norman, 2006. "Product Differentiation and Film Programming Choice: Do First-Run Movie Theatres Show the Same Films?," NBER Working Papers 12646, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  11. Klemperer, Paul, 1992. "Equilibrium Product Lines: Competing Head-to-Head May Be Less Competitive," American Economic Review, American Economic Association, vol. 82(4), pages 740-55, September. [Downloadable!] (restricted)
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  13. De Fraja, Giovanni, 1996. "Product line competition in vertically differentiated markets," International Journal of Industrial Organization, Elsevier, vol. 14(3), pages 389-414, May. [Downloadable!] (restricted)
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