Stochastic Market Structure: Concentration Measures and Motion Picture Antitrust
This paper examines the usefulness of concentration indices in characterizing the degree of competition in the motion picture industry. It shows that concentration ratios and the Herfindahl-Hirschman index give a misleading picture of the degree of competition in the industry. All these indices exhibit large fluctuations that make the common practice of calculating a static measure erroneous. Market shares are shown to follow a stochastic Pareto- Lévy motion in which the market shares of the leading distributors are unstable, and positions often change. We show that this stochastic industry structure implies that the expected value of the HHI is undefined (infinite!). The motion picture industry is (stochastically) concentrated but highly competitive. We argue that this is likely to be true of other industries with similar stochastic features.
|Date of creation:||2003|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.sed.manchester.ac.uk/idpm
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Robert Axtell, 1999. "The Emergence of Firms in a Population of Agents," Working Papers 99-03-019, Santa Fe Institute.
- McCulloch, J Huston, 1978. "Continuous Time Processes with Stable Increments," The Journal of Business, University of Chicago Press, vol. 51(4), pages 601-19, October.
- Arthur De Vany & W. Walls, 1999. "Uncertainty in the Movie Industry: Does Star Power Reduce the Terror of the Box Office?," Journal of Cultural Economics, Springer, vol. 23(4), pages 285-318, November.
- 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.
- Curry, B & George, K D, 1983. "Industrial Concentration: A Survey," Journal of Industrial Economics, Wiley Blackwell, vol. 31(3), pages 203-55, March.
- De Vany, Arthur & Lee, Cassey, 2001. "Quality signals in information cascades and the dynamics of the distribution of motion picture box office revenues," Journal of Economic Dynamics and Control, Elsevier, vol. 25(3-4), pages 593-614, March.
- Saving, Thomas R, 1970. "Concentration Ratios and the Degree of Monopoly," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 11(1), pages 139-46, February.
When requesting a correction, please mention this item's handle: RePEc:ags:idpmcr:30701. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.