Deterministic Adoption in Movie Industry
In this paper, we investigate the decision making process by movie goers. Under incomplete information environment, movie goers will have to learn the quality of the movie from the information relayed by predecessors. The hypothesis is formed by the movie goers when the movie is first released, and it is then compared to information received. In this environment, movie goers will constantly upgrade the belief system, or discard the weaker ones if found to be not consistent with the overall quality information received. Thus, positive news relayed in the initial stage will be magnified to greater importance; the movie becomes a hit. We model this deterministic adoption with first order difference equation. We find that the Hit movies exhibit higher deterministic adoption behavior and the relationship between current and previous adoptions can last longer, than if the movie is a flop. The time path or orbit of the dynamic growth also exhibits non-oscillatory behavior and converge to equilibrium level quickly; when the deterministic adoption mechanism loses its strength, the subsequent adoptions will eventually die off. In other words, the previous adoptions cannot determine the future adoptions. Although this behavior is present in both Hit and Non-hit movies, this diminishing mechanism is triggered in much earlier stage in Non-hit movies than it is in Hit movies.
|Date of creation:||Oct 2007|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
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.:
- Fudenberg, Drew & Ellison, Glenn, 1995.
"Word-of-Mouth Communication and Social Learning,"
3196300, Harvard University Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:7831. 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: (Joachim Winter)
If references are entirely missing, you can add them using this form.