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The Block Booking of Films Reexamined

Listed author(s):
  • Hanssen, F Andrew

Block booking, banned by the U.S. Supreme Court, involves selling motion pictures as a package. The most generally accepted explanation for the practice is that it prevented exhibitors from "oversearching"--from rejecting films revealed ex post to be of below-average value from an ex ante average-valued package. This article examines the way in which block booking developed, the nature of the optimization problem, and the specifics of block-booking contracts and finds little to support that hypothesis. Block booking emerged at a time when there was no over-searching problem, it was applied much more flexibly than a primary concern with oversearching would suggest, and exhibitors failed to make use of contractually permitted opportunities to behave in ways block booking was posited necessary to avoid. This article proposes instead that block booking was primarily intended to cheaply provide films in quantity, a claim made by movie producers of the time. Copyright 2000 by the University of Chicago.

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Article provided by University of Chicago Press in its journal Journal of Law & Economics.

Volume (Year): 43 (2000)
Issue (Month): 2 (October)
Pages: 395-426

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Handle: RePEc:ucp:jlawec:v:43:y:2000:i:2:p:395-426
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  1. De Vany, Arthur & Walls, W David, 1996. "Bose-Einstein Dynamics and Adaptive Contracting in the Motion Picture Industry," Economic Journal, Royal Economic Society, vol. 106(439), pages 1493-1514, November.
  2. Ralph Cassady & Jr., 1933. "Some Economic Aspects of Motion Picture Production and Marketing," The Journal of Business, University of Chicago Press, vol. 6, pages 113-113.
  3. Klein, Benjamin & Leffler, Keith B, 1981. "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 615-641, August.
  4. Kerr, Catherine E., 1990. "Incorporating the Star: The Intersection of Business and Aesthetic Strategies in Early American Film," Business History Review, Cambridge University Press, vol. 64(03), pages 383-410, September.
  5. De Vany, Arthur S & Walls, W David, 1997. "The Market for Motion Pictures: Rank, Revenue, and Survival," Economic Inquiry, Western Economic Association International, vol. 35(4), pages 783-797, October.
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