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Demand Shifts and Second Degree Price discimination - the Impact of DVDs on the Motion Pictures Industry

Author

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  • Arie Beresteanu

Abstract

This paper applies models of price discrimination to the motion picture industry. Movies are durable goods with no resale market. Therefore, price discrimination using time can be used. The distributors release the movie in two different periods: theaters and video. The first is a high quality product and the second is a low quality product issued in a later point in time. The quality gap between the two versions of the product has shrunk as the DVD technology penetrated the market. This paper compares two years: 1995 and 2000. Initial results show a difference between the two years. The most evident one is a shrinkage of the time between the theatrical release and the video release

Suggested Citation

  • Arie Beresteanu, 2004. "Demand Shifts and Second Degree Price discimination - the Impact of DVDs on the Motion Pictures Industry," Econometric Society 2004 North American Winter Meetings 609, Econometric Society.
  • Handle: RePEc:ecm:nawm04:609
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    File URL: http://repec.org/esNAWM04/up.21795.1049257032.pdf
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    References listed on IDEAS

    as
    1. Dana, James D, Jr & Spier, Kathryn E, 2001. "Revenue Sharing and Vertical Control in the Video Rental Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 49(3), pages 223-245, September.
    2. Dana, James D, Jr, 2001. "Competition in Price and Availability When Availability is Unobservable," RAND Journal of Economics, The RAND Corporation, vol. 32(3), pages 497-513, Autumn.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    price discrimination; motion picture industry; time consistency;

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies

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