IDEAS home Printed from https://ideas.repec.org/a/bpj/bejeap/v15y2015i1p13n14.html
   My bibliography  Save this article

Pricing of First-Run Movies in Small U.S. Metropolitan Areas: Multimarket Contact and Chain Effects

Author

Listed:
  • Feinberg Robert M.

    (American University, 4400 Massachusetts Ave. N.W., Washington, DC 20016, USA)

Abstract

In recent years, the role of multimarket contact (MMC) among firms in influencing market performance has been studied for a relatively small group of industries – with banking and airlines most often examined, though the cement and telecommunications industries have been studied as well. This paper investigates this issue for the local movie theater industry in the U.S., one not previously studied in this regard. In small U.S. metropolitan areas, there is considerable variation in the nature of MMC among theater chains (large and small), which allows us to examine whether MMC among firms has an impact on movie pricing in these smaller markets. Data on movie pricing, market structure, and income and population characteristics are obtained for 118 multi-screen first-run movie theaters in 79 small metropolitan areas – those with under 250,000 people – which are not part of larger “consolidated” metropolitan areas. Analysis provides evidence supportive of MMC effects but suggestive of its limited applicability.

Suggested Citation

  • Feinberg Robert M., 2015. "Pricing of First-Run Movies in Small U.S. Metropolitan Areas: Multimarket Contact and Chain Effects," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(1), pages 285-297, January.
    • Handle: RePEc:bpj:bejeap:v:15:y:2015:i:1:p:13:n:14
    DOI: 10.1515/bejeap-2014-0070
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/bejeap-2014-0070
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/bejeap-2014-0070?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Ciliberto, Federico & Williams, Jonathan, 2010. "Does Multimarket Contact Facilitate Tacit Collusion? Inference on Conjectural Parameters in the Airline Industry," MPRA Paper 24888, University Library of Munich, Germany.
    2. Davis, Peter, 2005. "The Effect of Local Competition on Admission Prices in the U.S. Motion Picture Exhibition Market," Journal of Law and Economics, University of Chicago Press, vol. 48(2), pages 677-708, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Haizhen Lin & Ian M. McCarthy, 2023. "Multimarket Contact in Health Insurance: Evidence from Medicare Advantage," Journal of Industrial Economics, Wiley Blackwell, vol. 71(1), pages 212-255, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Feinberg, Robert M., 2014. "Price effects of multimarket contact among movie chains in small US metropolitan areas," Economics Letters, Elsevier, vol. 123(1), pages 6-8.
    2. A. Yeşim Orhun & Sriram Venkataraman & Pradeep K. Chintagunta, 2016. "Impact of Competition on Product Decisions: Movie Choices of Exhibitors," Marketing Science, INFORMS, vol. 35(1), pages 73-92, January.
    3. Luca Aguzzoni & Elena Argentesi & Lorenzo Ciari & Tomaso Duso & Massimo Tognoni, 2016. "Ex post Merger Evaluation in the U.K. Retail Market for Books," Journal of Industrial Economics, Wiley Blackwell, vol. 64(1), pages 170-200, March.
    4. Böhme Enrico & Müller Christopher, 2011. "Searching for the Concentration-Price Effect in the German Movie Theater Industry," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 231(4), pages 479-493, August.
    5. Vishal Singh & Ting Zhu, 2008. "Pricing and Market Concentration in Oligopoly Markets," Marketing Science, INFORMS, vol. 27(6), pages 1020-1035, 11-12.
    6. Drevs, Florian, 2013. "The Challenge of the Unknown – The Effect of Pay-What-You-Want on the Market Success of Publicly Subsidized Films," ZögU - Zeitschrift für öffentliche und gemeinwirtschaftliche Unternehmen, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 36(4), pages 255-270.
    7. Christos Genakos & Tommaso Valletti & Frank Verboven, 2018. "Evaluating market consolidation in mobile communications," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 33(93), pages 45-100.
    8. Brueckner Jan K. & Picard Pierre M., 2013. "Airline Alliances, Carve-Outs and Collusion," Review of Network Economics, De Gruyter, vol. 12(2), pages 211-227, June.
    9. Christopher Müller & Enrico Böhme, 2011. "A note on the relationship of mainstream and art house movie theaters," Economics Bulletin, AccessEcon, vol. 31(1), pages 29-34.
    10. Abe Dunn, 2009. "Does Competition Among Medicare Advantage Plans Matter?: An Empirical Analysis of the Effects of Local Competition in a Regulated Environment," EAG Discussions Papers 200905, Department of Justice, Antitrust Division.
    11. Jason M. T. Roos & Ron Shachar, 2014. "When Kerry Met Sally: Politics and Perceptions in the Demand for Movies," Management Science, INFORMS, vol. 60(7), pages 1617-1631, July.
    12. Greenfield, Daniel, 2014. "Competition and service quality: New evidence from the airline industry," Economics of Transportation, Elsevier, vol. 3(1), pages 80-89.
    13. Sault, Joanne & Toivanen, Otto & Waterson, Michael, 2003. "Learning and Location," The Warwick Economics Research Paper Series (TWERPS) 693, University of Warwick, Department of Economics.
    14. Beckert, Walter & Mazzarotto, Nicola, 2010. "Price-concentration analysis in merger cases with differentiated products," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 4, pages 1-23.
    15. Orbach, Barak Y. & Einav, Liran, 2007. "Uniform prices for differentiated goods: The case of the movie-theater industry," International Review of Law and Economics, Elsevier, vol. 27(2), pages 129-153.
    16. Ibrahim Mohammed & Basak Denizci Guillet & Rob Law, 2019. "Modeling dynamic price dispersion of hotel rooms in a spatially agglomerated tourism city for weekend and midweek stays," Tourism Economics, , vol. 25(8), pages 1245-1264, December.
    17. Johannes Sauer & Matthew Gorton & John White, 2012. "Marketing, cooperatives and price heterogeneity: evidence from the CIS dairy sector," Agricultural Economics, International Association of Agricultural Economists, vol. 43(2), pages 165-177, March.
    18. Michel, Christian, 2013. "Identification and Estimation of Intra-Firm and Industry Competition via Ownership Change," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 80488, Verein für Socialpolitik / German Economic Association.
    19. Robert M. Feinberg, 2015. "“Exports‐at‐Risk”: The Effect of Multimarket Contact in International Trade," Southern Economic Journal, John Wiley & Sons, vol. 81(3), pages 769-781, January.
    20. Granlund, David & Bergman, Mats A., 2017. "Price competition in pharmaceuticals – evidence from 1303 Swedish markets," Umeå Economic Studies 952, Umeå University, Department of Economics.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bejeap:v:15:y:2015:i:1:p:13:n:14. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyterbrill.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.