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Abstract

This paper presents an empirical assessment of movie theatre attendance in two major metropolitan markets and provides strong support for the importance of spatial characteristics in determing attendance. We consider the hypothesis that attendance at particular movie theatres reflects a tension between two effects: a negative competion effect and a positive agglomeration effect. We find evidence that the competition effect dominates. Further, we identify a pattern of systematic spatial decay in the impact of this effect on demand.

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File URL: http://ase.tufts.edu/econ/research/documents/2012/normanSpatialCompetition.pdf
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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 0763.

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Date of creation: 2011
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Handle: RePEc:tuf:tuftec:0763

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Web page: http://ase.tufts.edu/econ

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Find related papers by JEL classification:

• L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
• D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
• L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

This paper has been announced in the following NEP Reports:

• NEP-ALL-2012-03-28 (All new papers)
• NEP-COM-2012-03-28 (Industrial Competition)
• NEP-GEO-2012-03-28 (Economic Geography)
• NEP-IND-2012-03-28 (Industrial Organization)
• NEP-URE-2012-03-28 (Urban & Real Estate Economics)

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1. Peter Davis, 2006. "Spatial competition in retail markets: movie theaters," RAND Journal of Economics, RAND Corporation, vol. 37(4), pages 964-982, December.
2. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716.
3. David A. Reinstein & Christopher M. Snyder, 2005. "THE INFLUENCE OF EXPERT REVIEWS ON CONSUMER DEMAND FOR EXPERIENCE GOODS: A CASE STUDY OF MOVIE CRITICS -super-* ," Journal of Industrial Economics, Wiley Blackwell, vol. 53(1), pages 27-51, 03.
4. Pinkse, Joris & Slade, Margaret E., 1998. "Contracting in space: An application of spatial statistics to discrete-choice models," Journal of Econometrics, Elsevier, vol. 85(1), pages 125-154, July.
5. Joris Pinkse & Margaret E. Slade & Craig Brett, 2002. "Spatial Price Competition: A Semiparametric Approach," Econometrica, Econometric Society, vol. 70(3), pages 1111-1153, May.
6. Ben-Akiva, Moshe & de Palma, Andre & Thisse, Jacques-Francois, 1989. "Spatial competition with differentiated products," Regional Science and Urban Economics, Elsevier, vol. 19(1), pages 5-19, February.
   
   • BEN-AKIVA, M. & de PALMA, A. & THISSE, J.-F., 1985. "Spatial competition with differentiated products," CORE Discussion Papers 1985017, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
7. Peter Davis, 2006. "MEASURING THE BUSINESS STEALING, CANNIBALIZATION AND MARKET EXPANSION EFFECTS OF ENTRY IN THE U.S. MOTION PICTURE EXHIBITION MARKET -super-* ," Journal of Industrial Economics, Wiley Blackwell, vol. 54(3), pages 293-321, 09.
8. Janet S. Netz & Beck A. Taylor, 1998. "Maximum or Minimum Differentiation? An Empirical Investigation into the Location of Firms," Industrial Organization 9812003, EconWPA.
9. De Vany, A. & Walls, W.D., 2000. "Does Hollywood make too many R-Rated Movies? Risk, Stochastic Dominance, and the Illusion of Expectation," Papers 99-00-24, California Irvine - School of Social Sciences.
   
   • Arthur De Vany & W. David Walls, 2002. "Does Hollywood Make Too Many R-Rated Movies? Risk, Stochastic Dominance, and the Illusion of Expectation," The Journal of Business, University of Chicago Press, vol. 75(3), pages 425-452, July.
10. A. Collins & A. E. Scorcu & R. Zanola, 2008. "Distribution Conventionality in the Movie Sector: An Econometric Analysis of Cinema Supply," Working Papers 639, Dipartimento Scienze Economiche, Universita' di Bologna.
    
    • Alan Collins & Antonello E. Scorcu & Roberto Zanola, 2009. "Distribution conventionality in the movie sector: an econometric analysis of cinema supply," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 30(8), pages 517-527.
11. A. Sisto & R. Zanola, 2010. "Cinema attendance in Europe," Applied Economics Letters, Taylor and Francis Journals, vol. 17(5), pages 515-517.
12. Salvanes, Kjell G. & Steen, Frode & Sorgard, Lars, 2005. "Hotelling in the air? Flight departures in Norway," Regional Science and Urban Economics, Elsevier, vol. 35(2), pages 193-213, March.

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