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A Note On Uniform Pricing In The Motion-Picture Industry

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  • CHUNG, HOE SANG

Abstract

Uniform pricing in the motion-picture industry is puzzling in light of the potential profitability of prices that vary with demand characteristics. Considering a model a la Hotelling in which moviegoers form their beliefs about movie quality through pricing schemes to which an exhibitor commits, we characterize the conditions under which committing to uniform pricing is more profitable than committing to variable pricing. Some extensions of the model are discussed as well.

Suggested Citation

  • Chung, Hoe Sang, 2015. "A Note On Uniform Pricing In The Motion-Picture Industry," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 56(2), pages 231-242, December.
    • Handle: RePEc:hit:hitjec:v:56:y:2015:i:2:p:231-242
    DOI: 10.15057/27597
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    References listed on IDEAS

    as
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    3. Enrico Moretti, 2011. "Social Learning and Peer Effects in Consumption: Evidence from Movie Sales," Review of Economic Studies, Oxford University Press, vol. 78(1), pages 356-393.
    4. Ben Shiller & Joel Waldfogel, 2011. "Music for a Song: An Empirical Look at Uniform Pricing and Its Alternatives," Journal of Industrial Economics, Wiley Blackwell, vol. 59(4), pages 630-660, December.
    5. Patrick DeGraba, 1995. "Buying Frenzies and Seller-Induced Excess Demand," RAND Journal of Economics, The RAND Corporation, vol. 26(2), pages 331-342, Summer.
    6. Courty, Pascal, 2003. "Ticket Pricing under Demand Uncertainty," Journal of Law and Economics, University of Chicago Press, vol. 46(2), pages 627-652, October.
    7. Asher Wolinsky, 1983. "Prices as Signals of Product Quality," Review of Economic Studies, Oxford University Press, vol. 50(4), pages 647-658.
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    More about this item

    Keywords

    uniform pricing; variable pricing; movie quality; beliefs;
    All these keywords.

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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