Demand Shifts and Changes in Competition: Evidence from the Movie Theatre Industry
In this paper, I empirically examine how demand shifts affect firm behaviour. In particular, I study how competitive behaviour between firms changes across different demand states. For this purpose, I use price and concentration data from the Spanish movie theatre industry in 1995 and 2000. The evidence suggests that demand shifts change the competitive nature of the industry under study, and that this change differs across different demand shifts. Firms deviate less from tacit collusive behaviour when gains of deviation are smaller.
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Volume (Year): 13 (2006)
Issue (Month): 3 ()
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