Journal of Cultural Economics

, Volume 36, Issue 3, pp 179–206 | Cite as

Competition among movie theaters: an empirical investigation of the TohoSubaru antitrust case

Original Article

Abstract

This study assesses the 1951 TohoSubaru antitrust merger case in the Japanese movie theater market. Using information regarding the location of theaters in the Tokyo metropolitan area, I examined the relationship between the number of attendees and the structure of the local market competition: a regression equation relating to the number of attendees and the local market structure was derived from a model of product differentiation, which incorporated the features of a movie theater market. The results revealed that nearby rival theaters had negative effects on other theaters’ attendance numbers, and these effects did not dissipate even where there was 10 km between each theater. Based on empirical results, it appears that the Tokyo High Court and the competition agency defined the geographic movie theater market as being smaller than it actually was. The results of this study suggest that the application of econometric analysis, combining geographic information, is useful in merger reviews of retail industries, such as movie theaters.

Keywords

Antitrust Local market competition Merger Movie theater market 

JEL Classification

L11 L41 L82 N45 N75 

Notes

Acknowledgments

Earlier versions of this study were presented at the AsLEA Annual Meeting, the EARIE, Hitotsubashi University, the IIOC, the JEA Annual Meeting, the JFTC, Kyushu University, Kwansei Gakuin, and Nihon University. I would like to express sincere gratitude to the editor, two anonymous referees, and various seminar attendees for their useful comments and suggestions. The financial supports from the Grant-in-Aid for Scientific Research (KAKENHI) and the Okawa Foundation are gratefully acknowledged. Needless to say, all remaining errors are mine.

References

  1. ABA Section of Antitrust Law. (2005). Econometrics: Legal, practical, and technical issues. Chicago: American Bar Association.Google Scholar
  2. Ackerberg, D. A., & Rysman, M. (2005). Unobserved product differentiation in discrete-choice models: Estimating price elasticities and welfare effects. RAND Journal of Economics, 36(4), 771–788.Google Scholar
  3. Ashenfelter, O., Ashmore, D., Baker, J. B., Greason, S., & Hosken, S. (2006). Empirical methods in merger analysis: Econometric analysis of pricing in FTC v. Staples. International Journal of the Economics of Business, 13(2), 265–279.CrossRefGoogle Scholar
  4. Baker, J. B. (1999). Econometric analysis in FTC v. Staples. Journal of Public Policy & Marketing, 18(1), 11–21.Google Scholar
  5. Berry, S. (1994). Estimating discrete-choice models of product differentiation. RAND Journal of Economics, 25(2), 242–262.CrossRefGoogle Scholar
  6. Berry, S., Levinsohn, J., & Pakes, A. (1995). Automobile prices in market equilibrium. Econometrica, 63(4), 841–890.CrossRefGoogle Scholar
  7. Chisholm, D. C., McMillan, M. S., & Norman, G. (2010). Product differentiation and film-programming choice: Do first-run movie theaters show the same films? Journal of Cultural Economics, 34(2), 131–145.CrossRefGoogle Scholar
  8. Chisholm, D. C., & Norman, G. (2012). Spatial competition and market share: An application to motion pictures. Journal of Cultural Economics. doi: 10.1007/s10824-012-9168-4
  9. Chung, W., & Kalnins, A. (2001). Agglomeration effects and performance: A test of the Texas lodging industry. Strategic Management Journal, 22(10), 969–988.CrossRefGoogle Scholar
  10. Dalkir, S., & Warren-Boulton, F. R. (2009). Prices, market definition, and the effects of merger: Staple-Office Depot (1997). In J. E. Kwoka Jr. & L. J. White (Eds.), The antitrust revolution: Economics, competition, and policy (5th ed., pp. 178–199). Oxford: Oxford University Press.Google Scholar
  11. Davis, P. (2005). The effect of local competition on retail prices: The US motion picture exhibition market. Journal of Law and Economics, 48(2), 677–708.CrossRefGoogle Scholar
  12. Davis, P. (2006a). Measuring the business stealing, cannibalization and market expansion effects of entry in the US motion picture exhibition market. Journal of Industrial Economics, 54(3), 293–321.CrossRefGoogle Scholar
  13. Davis, P. (2006b). Spatial competition in retail markets: movie theaters. RAND Journal of Economics, 37(4), 964–982.CrossRefGoogle Scholar
  14. De Vany, A. (2004). Hollywood economics: How extreme uncertainty shapes the film industry. Abingdon: Routledge.Google Scholar
  15. Einav, L. (2007). Seasonality in the US motion picture industry. RAND Journal of Economics, 38(1), 127–145.CrossRefGoogle Scholar
  16. Frankl, J. (1999). An analysis of Japanese corporate structure, 1915–1937. Journal of Economic History, 59(4), 997–1015.CrossRefGoogle Scholar
  17. Gaynor, M., & Vogt, W. (2003). Competition among hospitals. RAND Journal of Economics, 34(4), 764–785.CrossRefGoogle Scholar
  18. General Administrative Agency of the Cabinet. (1953). Showa 25 nen kokusei chosa hokokku (Population census of 1950) Report by prefecture, Vol. VII, part 13: Tokyo-to. Tokyo (in Japanese).Google Scholar
  19. Gil, R. (2010). An empirical investigation of the Paramount antitrust case. Applied Economics, 42(2), 171–183.CrossRefGoogle Scholar
  20. Hayashi, S. (2008). Merger regulation in the antimonopoly law. Nagoya Journal of Law and Politics, 224, 21–117.Google Scholar
  21. IKAROS Publications. (2011). Toden no 100-nen: Since 1911 (100 years of the Toden streetcars: Since 1911). Tokyo: IKAROS Publications.Google Scholar
  22. Inoue, A. (2007). Japanese Antitrust Law Manual: Law, Cases and Interpretation of the Japanese Antimonopoly Act, International Competition Law Series 27. Netherlands: Kluwer Law International.Google Scholar
  23. Japan Fair Trade Commission. (1951). Toho kabushiki kaisha no ken (the case of Toho, Co.): Showa 25 nen (han) 10 go. Shinketsushu (JFTC Decision Report), 2, 321–328 (in Japanese).Google Scholar
  24. Japan Fair Trade Commission. (1952). Toho kabushiki kaisha no ken (the case of Toho, Co.): Showa 25 nen gyo (na) 21 go, Shinketsushu (JFTC Decision Report), Appendix 1, 3, 635–657 (in Japanese).Google Scholar
  25. Japan Fair Trade Commission. (2007). Guidelines to application of the antimonopoly act concerning review of business combination.Google Scholar
  26. Jiji Tsushin-sha. (1951, 1952, 1954). Eiga nenkan (Jiji motion picture almanac), Tokyo (in Japanese).Google Scholar
  27. Kalnins, A. (2006). Markets: The US lodging industry. Journal of Economic Perspectives, 20(4), 203–218.CrossRefGoogle Scholar
  28. Kawahama, N., Sensui, F., Takeda, K., Miyai, M., Wakui, M., Ikeda, C., & Hayashi, S. (2008). Kigyo Ketsugo Gaidorain no kaisetsu to bunseki (Merger and acquisition guidelines: Examination and analysis). Tokyo: Shojihomu (in Japanese).Google Scholar
  29. Kinema Junpo Film Institute. (2005). Eiga Produsa no Kiso Chishiki (A Basic Guide for the Producer). Tokyo: Kinema Junpo (in Japanese).Google Scholar
  30. Kisugi, S. (1999). Nihon no Kyoso Seisaku no Rekishiteki Gaikan (I) (the History of the Japanese Competition Policy (I)). In A. Goto & K. Suzumura (Eds.), Nihon no Kyoso Seisaku (Competition Policy in Japan), Chapter 2 (pp. 17–44). Tokyo: University of Tokyo Press (in Japanese).Google Scholar
  31. Kitamura, H. (2010). Screening enlightenment: Hollywood and the cultural reconstruction of defeated Japan. Ithaca: Cornell University Press.Google Scholar
  32. Kouga, C. (Ed.). (2008). Bukka no Bunka-shi Jiten (Cultural and Historical Encyclopedia of Prices). Tokyo: Tenbosha (in Japanese).Google Scholar
  33. Manuszak, M. D., & Moul, C. C. (2008). Prices and endogenous market structure in office supply superstores. Journal of Industrial Economics, 50(1), 94–112.CrossRefGoogle Scholar
  34. Motta, M. (2004). Competition policy: Theory and practice. Cambridge: Cambridge University Press.Google Scholar
  35. Okazaki, T. (1993). The Japanese firm under the wartime planned economy. Journal of the Japanese and International Economies, 7(2), 175–203.CrossRefGoogle Scholar
  36. Okazaki, T. (2001). The role of holding companies in pre-war Japanese economic development: Rethinking Zaibatzu in perspectives of corporate governance. Social Science Japan Journal, 4(2), 243–268.CrossRefGoogle Scholar
  37. Orbach, B. Y., & Einav, L. (2007). Uniform prices for differentiated goods: The case of the movie-theater industry. International Review of Law and Economics, 27(2), 129–153.CrossRefGoogle Scholar
  38. Pinkse, J., Slade, M. E., & Brett, C. (2002). Spatial price competition: A semiparametric approach. Econometrica, 70(3), 1111–1153.CrossRefGoogle Scholar
  39. Sato, T. (2006). Nihon Eiga Shi (History of Japanese Movies) 2: 1941–1959 (an augmented edition). Tokyo: Iwanami Shoten (in Japanese).Google Scholar
  40. Smith, H. (2004). Supermarket choice and supermarket competition in market equilibrium. Review of Economic Studies, 71(1), 235–263.CrossRefGoogle Scholar
  41. Sunada, M. (2009). An empirical investigation of the toho-subaru antitrust case: A merger case in the Japanese movie theater market. CPRC Discussion Paper Series, CPDP-43-E.Google Scholar
  42. Thomadsen, R. (2005). The effect of ownership structure on price in geographically differentiated industries. RAND Journal of Economics, 36(4), 908–929.Google Scholar
  43. Warren-Boulton, F. R., & Dalkir, S. (2001). Staples and Office Depot: An event probability case study. Review of Industrial Organization, 19(4), 467–479.CrossRefGoogle Scholar
  44. Watson, R. (2009). Product variety and competition in the retail market for eyeglasses. Journal of Industrial Economics, 57(2), 217–251.CrossRefGoogle Scholar
  45. White, L. (2008). The role of competition policy in the promotion of economic growth. NYU Law and Economics Research Paper Series; No. 08-23.Google Scholar
  46. Yomota, I. (2000). Nihon Eiga Shi 100-nen (100 years of Japanese Movies). Tokyo: Shueisha (in Japanese).Google Scholar

Copyright information

© Springer Science+Business Media New York 2012

Authors and Affiliations

  1. 1.School of EconomicsOsaka Prefecture UniversityNaka-ku, Sakai, OsakaJapan

Personalised recommendations