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Inflation in weekend box office estimates

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  • Neil Malhotra
  • Edmund Helmer

Abstract

Do movie studios inflate box office estimates that they report every Sunday? Is the pattern of this inflation consistent with the studios’ strategic incentives? Analysing actual and estimated box office returns of major movie releases between 2003 and 2010, we find that movie studios substantially overestimate weekend box office performance and that this overestimation is highly unlikely to be due to chance. Our findings also suggest that box office inflation is strategic because (1) inflation is substantially higher in the first weekend of release when the incentives are greatest to generate positive word of mouth and (2) inflation for the top two films in a weekend increases with the degree of competition between the films.

Suggested Citation

  • Neil Malhotra & Edmund Helmer, 2012. "Inflation in weekend box office estimates," Applied Economics Letters, Taylor & Francis Journals, vol. 19(14), pages 1411-1415, September.
  • Handle: RePEc:taf:apeclt:v:19:y:2012:i:14:p:1411-1415
    DOI: 10.1080/13504851.2011.631883
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    Cited by:

    1. Jordi McKenzie, 2023. "The economics of movies (revisited): A survey of recent literature," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 480-525, April.

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