A Puzzle or a Choice: Uniform Pricing for Motion Pictures at the Box
- Chien-Ping Chen
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Consumer differentiated preferences over movies make the uniform pricing regime at the box office a puzzle in the motion picture business. This paper explores the nature of price rigidity at the current uniform price. It concludes that the high profit mark-up from concession sales helps to retain uniform pricing as the optimal choice for exhibitors, without distributors’ condemned intervention. Unless many successful event movies are expected, tiered pricing over regular and event movies will not benefit either exhibitors or distributors. The criteria for exhibitors to favor tiered pricing and the distributors’ choices to eliminate the agency problem are also developed.
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- A Puzzle or a Choice: Uniform Pricing for Motion Pictures at the Box
Atlantic Economic Journal
Volume 37, Issue 1 , pp 73-85
- Cover Date
- Print ISSN
- Online ISSN
- Springer US
- Additional Links
- Agency problem
- Industry Sectors
- Chien-Ping Chen (1)
- Author Affiliations
- 1. University of Houston-Victoria, Victoria, TX, USA