the impact of immigration comparing two global eras summary this paper asks whether history can inform modern debate about immigration s impact on high wage economies it examines the relationship between migration s labor market impact and capital flows before 1914 the first global era it then assesses the effects of immigration on wages and employment with and without international capital mobility today in the second global era it then explores the links between these economic relationships welfare burdens and immigration policy it concludes with an explanation for the apparent difference in immigration s impact in the two global eras and thus on policy

analyzing the welfare impacts of full line forcing contracts theoretical investigations have examined both anti competitive and efficiency inducing rationales for vertical bundling making empirical evidence important to understanding its welfare implications we use an extensive dataset on full line forcing contracts between movie distributors and video retailers to empirically measure the impact of vertical bundling on welfare we identify and measure three primary effects of full line forcing contracts market coverage leverage and efficiency we find that bundling increases market coverage and efficiency but has little impact on one distributor s gaining leverage over another as a result we estimate that full line forcing contracts increased consumer and producer surplus in this application

optimal timing of sequential distribution the impact of congestion externalities and day and date strategies the window between a film s theatrical and video releases has been steadily declining with some studios now testing day and date strategies i e when a film is released across multiple channels at once we present a model of consumer choice that examines trade offs between substitutable products theatrical and video forms the possibility of purchasing both alternatives a congestion externality affecting consumption at theaters with heterogeneous consumer groups and a decay in the quality of the content over time our model permits a normative study of the impact of shorter release windows zero three months for which there is a scarcity of relevant data we characterize the market conditions under which a studio makes video release time and price selections indicative of direct to video day and date and delayed video release tactics during seasons of peak congestion we establish that day and date strategies are optimal for high quality films with high content durability i e films whose content tends to lead consumers to purchase both alternatives whereas prices are set to perfectly segment the consumer market for films with low content durability we find that lower congestion effects provide studios with incentives to delay release and price the video to induce multiple purchasing behavior for films with higher content durability however an increase in congestion effects can in certain cases actually lead to higher studio profitability we also show that at the lower range of quality an increase in movie quality should often be accompanied by a later video release time surprisingly however we observe the opposite result at the upper range of movie quality an increase in quality can justify an earlier release of the video

a parsimonious model for forecasting gross box office revenues of motion pictures the primary objective of this paper is to develop a parsimonious model for forecasting the gross box office revenues of new motion pictures based on early box office data the paper also seeks to provide insights into the impact of distribution policies on the adoption of new products the model is intended to assist motion picture exhibitor chains retailers in managing their exhibition capacity and in negotiating exhibition license agreements with distributors studios by allowing them to project the box office potential of the movies they plan to or currently exhibit based on early box office results it is also of interest to practitioners in other software industries e g music books cd roms where the distribution intensity is highly variable over the product life cycle and is an important determinant of new product adoption patterns the model and its extensions are of interest to academic researchers interested in modeling distribution effects in new product adoption as well as forecasters looking for ways to leverage historical data on related products to forecast the sales of new products we draw upon a queuing theory framework to conceptualize stochastically the consumer s movie adoption process in two steps the time to decide to see the new movie and the time to act on the adoption decision the parameter for the time to decide process captures the intensity of information intensity flowing from various information sources while the parameter for the time to act process is related to the delay created by limited distribution intensity and other factors our conceptualization extends existing new product forecasting models which assume that consumers act instantaneously on the motivating information they receive about the new product the resulting model is parsimonious yet it accommodates a wide range of adoption patterns in addition the stochastic formulation allows us to quantify the uncertainty surrounding the expected adoption pattern in the empirical testing we focus on the most parsimonious version of the modeling framework boxmod i a model that assumes stationarity with respect to the two shape parameters that characterize the adoption process the model produces fairly accurate early forecasts using at most the first three weeks of data for calibration and the predictive performance of the model compares favorably with benchmark models we propose extensions of the basic model that account for more realistic non stationary distribution intensity patterns including a wide release pattern that relies on intensive distribution and promotion and a platform release pattern that involves a gradual buildup of distribution intensity finally we present an adaptive weighing scheme that combines initial parameter estimates obtained from a meta analysis procedure with estimates obtained from early data to produce forecasts of box office revenues for a new movie when little or no box office data are available an important finding from the empirical testing is that motion picture box office revenue patterns display remarkable empirical regularity we find that there are only three classes of adoption patterns and these can all be represented within the basic model by using a two parameter exponential or erlang 2 probability distribution or a three parameter generalized gamma distribution we also find that cumulative box office revenues can be predicted with reasonable accuracy often within 10 of the actual using as little as two or three data points however our attempts to predict revenue patterns without any sales data meet with limited success while the scale parameter can be estimated reasonably well from a historical database of parameter values we find that it is considerably more difficult to predict the shape parameters using historical data the parsimony we seek in developing the model comes at the cost of several limiting assumptions we assume that the time to decide subprocess and the time to act subprocess are independent which may not be the case if decisions on continued exhibition by retailers are endogenously related to box office revenues over the life cycle in the basic model formulation we also assume that the time to act process can be represented by an exponential distribution which may not always be the case while we provide some empirical evidence to support these assumptions further research could relax these and other assumptions to enrich the basic model although this would entail some loss in parsimony

the cliometrics of international migration a survey abstract this is a survey of some of the key studies in the literature on international migration in history that may be described as cliometric this literature uses the concepts and approaches of applied economics to investigate a range of historical issues and there are strong parallels with the questions that have been addressed in the literature on contemporary migrations here i focus on the period 1850 1940 and chiefly on migration from europe to the new world the survey is organized around six themes that include the forces driving migration over time and across space the assimilation of migrants and their effects on wages and income distribution in source and destination countries and the evolution of immigration policy although this literature has drawn heavily on the tool kit of applied economists it also provides a wider perspective on many of the issues that concern migration today

research on the motion picture industry state of the art and new directions off the beaten track away from theatrical release the motion picture industry has been subject of extensive academic research over the last decades however most scholars focused on the u s theatrical motion picture market the number of research activities regarding even more profitable release windows such as home video or television has been substantially lower although international distribution is essential for a motion picture project to break even there has been little significant re search on most other markets this paper aims at summarizing the current state of research on the motion picture industry particularly from marketing and management perspective revealing research gaps and proposing recommendations for future research endeavors therefore a three pillar scheme is developed to systemize previous findings research on intraorganizational decision making contractual relationships between national stakeholders and international market competition are differentiated since these insights are mainly derived from u s theatrical exhibition they can hardly be applied to other markets and exhibition windows thus potential research areas are identified to expand knowledge of posttheatrical and international markets

cheap tuesdays and the demand for cinema many movie markets are characterised by extensive uniform pricing practices hampering the ability to estimate price elasticities of demand australia presents a rare exception with most cinemas offering cheap tuesday ticket prices we exploit this feature to estimate a random coefficients discrete choice model of demand for the sydney region in 2007 we harness an extensive set of film cinema and time dependent characteristics to build a rich demand system our results are consistent with a market expansion effect from the practice of discounted tuesday tickets and suggest that cinemas could profit from price dispersion by discounts based on observable characteristics

how many viewers does a cable network need a survival analysis of cable networks this article employs survival duration analysis to determine how subscriber levels affect cable networks survival probabilities using piecewise constant hazards estimation we find that an additional one million subscribers increases a cable network s probability of survival in a given year by 17

movie advertising and the stock market valuation of studios a case of great expectations product innovation is the key revenue driver in the motion picture industry because major studios typically launch fewer than 20 movies per year the financial performance of a single release can have a major effect on the studio s profitability in this paper we study how single movie releases impact the investor valuation of the studio we analyze the change in postlaunch stock price and predict the direction and magnitude of excess returns based on the revenue expectation built up for a movie release that expectation is set in part by media support i e highly advertised movies are expected to draw larger audiences than others by using an event study methodology we isolate the impact of a movie launch on studio stock price and track the determinants of that change we examine a comprehensive data set comprising over 300 movies released by the largest studios our results indicate a clear interaction between the marketing support received by a movie and the direction and magnitude of its excess stock return post launch movies with above average prelaunch advertising have lower postlaunch stock returns than films with below average advertising our findings also suggest that movies that are hits at the box office may result in a lowering of stock price if they had high media support because of high performance expectations built up prior to launch thus prelaunch advertising plays a dual role of informing consumers about a movie s arrival as well as helping investors form expectations about the studio s profit performance

a bayesian model to forecast new product performance in domestic and international markets this paper attempts to shed light on the following research questions when a firm introduces a new product or service how can it effectively use the different information sources available to generate reliable new product performance forecasts how can the firm account for varying information availability at different stages of the new product launch and generate forecasts at each stage we address these questions in the context of the sequential launches of motion pictures in international markets players in the motion picture industry require forecasts at different stages of the movie launch process to aid decision making and the information sets available to generate such forecasts vary at different stages despite the importance of such forecasts the industry struggles to understand and predict sales of new movies in domestic and overseas markets we develop a bayesian modeling framework that predicts first week viewership for new movies in both domestic and several international markets we focus on the first week because industry players involved in international markets studios distributors and exhibitors are most interested in these predictions we draw on existing literature on forecasting performance of new movies to formulate our model specifically we model the number of viewers of a movie in a given week using a poisson count data model the number of screens distribution strategy movie attributes such as genre and presence absence of stars are among the factors modeled to influence viewership we employ a hierarchical bayes formulation of the poisson model that allows the determinants of viewership to vary across countries we adopt the bayesian approach for two reasons first it provides a convenient framework to model varying assumptions of information availability specifically it allows us to make forecasts by combining different sources of information such as domestic and international market specific data second this methodology provides us with the entire distribution of the new movie s performance forecast such a predictive distribution is more informative than a point estimate and provides a measure of the uncertainty in the forecasts we propose a bayesian prediction procedure that provides viewership forecasts at different stages of the new movie release process the methodology provides forecasts under a number of information availability scenarios thus forecasts can be obtained with just information from a historical database containing data on previous new product launches in several international markets as more information becomes available the forecasting methodology allows us to combine historical information with data on the performance of the new product in the domestic market and thereby to make forecasts with less uncertainty and greater accuracy our results indicate that for all the countries in the data set the number of screens on which a movie is released is the most important influence on viewership furthermore we find that local distribution improves movie sales internationally in contrast to the domestic market we also find evidence of similar genre preferences in geographically disparate countries we find that the proposed model provides accurate forecasts at the movie country level further the model outperforms all the extant models in the marketing literature that could potentially be used for making these forecasts a comparison of root mean square and mean absolute errors for movies in a hold out sample shows that the model that combines information available from the different sources generates the lowest errors a bayesian predictive model selection criterion corroborates the superior performance of this model we demonstrate that the bayesian model can be combined with industry rules of thumb to generate cumulative box office forecasts in summary this research demonstrates a bayesian modeling framework that allows the use of different information sources to make new product forecasts in domestic and international markets our results underscore the theme that each movie is unique as is each country and viewership results from an interaction of the product and the market hence the motion picture industry should use both product specific and market specific information to make new movie performance forecasts

who is against immigration a cross country investigation of individual attitudes toward immigrants abstract this paper empirically analyzes economic and noneconomic determinants of individual attitudes toward immigrants within and across countries the two survey data sets used covering a wide range of developed and developing countries make it possible to test for interactive effects between individual characteristics and country level attributes in particular theory predicts that the correlation between pro immigration attitudes and individual skill should be related to the skill composition of natives relative to immigrants in the destination country skilled individuals should favor immigration in countries where natives are more skilled than immigrants and oppose it otherwise results based on direct and indirect measures of the relative skill composition are consistent with these predictions noneconomic variables also are correlated with immigration attitudes but they don t alter significantly the labor market results

the effects of shared consumption on product life cycles and advertising effectiveness the case of the motion picture market abstractconsumers frequently consume hedonic products together with other consumers and derive value from this shared experience this article investigates the impact of shared consumption a type of social influence that determines the enjoyment of joint experiences in the context of a typical hedonic product movies the authors argue that this type of influence has important consequences for the diffusion curves of hedonic goods that are consumed together and the effectiveness of advertising in generating launch and postlaunch sales an empirically validated agent based model simulates the u s motion picture market with new movies launching competing and exiting the agent based model serves as a means to demonstrate the essential role of shared consumption for explaining movie life cycles and tests how advertising expenditures accelerate and or acquire movies demand in markets with varying levels of shared consumption the results provide key theoretical insights for the new product diffusion of

online content pricing purchase and rental markets digitization of content is changing how consumers and firms use purchase and rental markets low transaction costs make accessing content easier for consumers digital technology enables firms to create nondurable rental versions of their content and to restrict content to the purchasing consumer effectively shutting down resale markets to empirically analyze the interaction of purchase and rental markets i design a preference measurement tool to recover consumers intertemporal preferences through current period choices alone i then use these preferences to solve for a dynamic equilibrium between consumers and the firm in the context of the online home video market i find that when the firm is able to commit to holding prices fixed forever providing content through the purchase market alone is sufficient however when the firm is unable to commit it should serve both purchase and rental markets canonical theory models would predict exclusive rentals but the purchase option enables indirect price discrimination in practice i also find that when consumers place a premium on accessing new content they are less likely to intertemporally substitute thereby increasing the firm s pricing power consistent with theory commitment to future prices increases profits considerably this finding supports the rigid pricing structure of such retailers as apple despite studios push toward more pricing flexibility

at the movies the economics of exhibition contracts i introduction the literature on profit sharing stresses asymmetric information profit sharing occurs when a party has private information that cannot be credibly revealed or when a party s actions cannot be observed economists avoid taste based explanations such as risk sharing stigler and becker 1977 and other factors that may lead to sharing such as measurement costs we describe a real world sharing contract that is widely used the movie exhibition contract and argue that asymmetric information is not the main cause of sharing two explanations based on difficulties with forecasting revenue fit the facts better the first is that movie distributors studios or independent distributors and exhibitors theater owners are both risk averse and exhibition contracts are designed to share risk the second is that the sharing rules accompanied by ex post adjustments economize on measurement costs transaction costs and long term relationships also affect contractual practices we use an original data set of 2 769 exhibition contracts to inform our models and test hypotheses the data includes all contracts involving 13 theaters owned by wehrenberg theatres a prominent st louis exhibitor over roughly two years our models explain the sharing that occurs and the conditions that lead to adjustments and our findings may be relevant for other contracting environments our explanations for the features of exhibition contracts complement those of de vany and eckert 1991 and de vany and walls 1996 who emphasize that difficulties with forecasting demand necessitate the use of short term contingency rich contracts some other work on nonexhibition aspects of the movie business also compares asymmetric information models to alternatives ravid 1999 tests and rejects a model of asymmetric information at the project selection stage ravid and basuroy 2004 consider risk aversion at the project selection stage chisholm 1993 1997 and weinstein 1998 compare principal agent models to alternatives in studies of contracts between studios and talent in the next subsection we describe the basic features of modern exhibition contracts after that we describe how the sharing rules evolved over time and argue that asymmetric information does not explain the sharing rules section ii contains our models section iii contains our empirical work and section iv concludes the modern movie exhibition contract the unit of analysis is a single movie in a single theater a theater is a building that may contain multiple auditoriums although there is typically a boilerplate contract between each distributor and exhibitor that specifies general conditions that apply to all individual contracts terms such as sharing rules and run lengths vary by movie and theater a typical run ends after four to eight weeks but the run may be adjusted after early revenues are observed and holdover clauses may be used to extend the run as long as revenue is sufficiently high de vany and eckert 1991 and de vany and walls 1996 attribute adjustable runs to imprecise forecasts we focus on explaining the peculiar revenue sharing rule that is common in modern contracts some contracts are aggregate deals in which each side s percentage share remains fixed throughout the run but most are sliding scale deals in a sliding scale deal each week the distributor gets the maximum of two possible payments 1 90 of the movie s weekly ticket revenue over the house nut which is a flat payment to the exhibitor 2 a floor payment some percentage of the weekly ticket revenue that typically declines according to a sliding scale as the weeks go by perhaps 70 in the first week 60 by the third week and as low as 30 at the end of the run if the parties anticipate that revenue might peak in the second or later weeks which can occur when the movie opens before a holiday weekend for example the contract includes a best weeks clause that ensures that the high floor payments are associated with the high demand weeks

the impact of the 1962 repatriates from algeria on the french labor market this paper uses census data to examine the impact on the french labor market of the 900 000 people repatriated from algeria in 1962 repatriates settled in regions culturally and climatically simil

modeling multiattribute utility risk and belief dynamics for new consumer durable brand choice this paper proposes a brand choice model to aid in the prelaunch management of a new consumer durable entry in an existing category the model contributes to theory by integrating the critical phenomena of multiattribute preference risk and dynamics in an individual level expected utility framework the integration is based on established theoretical constructs in utility bayesian decision analysis and discrete choice theory measurement and estimation procedures are presented an application is described and the managerial relevance of this work as a planning and forecasting tool is examined

a policy approach to the environmental impacts of technological lock in abstract the broadening spectrum of environmental problems the uncertainty regarding their scale and duration and their possible irreversibility in the context of the growing social preference for environmental quality make it necessary to undertake an ex ante approach to the link between productive activity and environmental quality this link lies in technology and the right approach is to understand how the process of technological change can lead towards sustainability the added value of evolutionary economics in the context of environmental policy resides mainly in the fact that it warns that certain inferior environmental technologies may be locked in to the economic system the results of our model show that it would be advisable to undertake policies expressly aimed at the process of sustainable technological change applying an ex ante precautionary approach in a way that is complementary to the conventional equilibrium oriented environmental policies the nature of these policies and how they might be implemented are questions we will address from this novel approach to the concept of sustainable development in short the main objectives of this paper are to understand more fully the dynamics of the process of technological change its role in sustainable development and to assess the implications of this dynamic approach to techno environmental policy to achieve these goals we have developed an agent based model abm using distributed artificial intelligence dai concepts drawn from the general methodology of social simulation

cultural and other barriers to motion pictures trade i introduction the u s motion picture industry has long dominated world markets but its recent expansion has been especially dramatic hollywood s current share of the world film market has doubled since just 1990 whereas the european film industry is about one ninth the size it was in 1945 in the 1960s foreign films constituted 10 of the u s market by 1986 they made up 7 and today only about three quarters of 1 remarkably the global dominance of american films has evolved despite extensive protectionist efforts by other countries and virtually no barriers to trade by the united states as to other countries we might expect to find much more active effective protectionism against a culturally sensitive product than against generic products and services the characteristics of the product would suggest that the fate of u s motion picture exports would have at least mirrored the decline in american textiles and steel to the contrary the u s motion picture industry has been winning the global ballgame despite three strikes against it protectionism rising real domestic costs and relatively stable real domestic ticket prices we address this quandary of why protectionism fails in a cultural industry where protectionism is expected to succeed we do so first by examining the structure of the u s domestic motion picture industry as it turns out this structure provides a special impetus for exports we next examine the nature of protectionism in a world of soaring demand for films in this setting the american movie is a world product in a different sense than say the automobile the american movie is a world product because its presence is dominant the automobile is a world product mostly because its parts are interchangeable by its nature the american movie appears to have few substitutes even though hollywood can use foreign locales for filming american movies encounter different protectionist strategies in different places the divides fall either side of highly industrialized nations versus less developed nations english speaking versus non english speaking people literate versus less literate people and so on some countries and regions combine fees with subsidies whereas others engage in piracy quantitative or service restrictions few countries have traditional tariffs once we have defined the characteristics of the u s movie industry and foreign strategies of protectionism we can better identify the relevant variables and appropriate models to explain not only industry exports but also the failure of protectionism we end up with a complex gravity iceberg model as a method of estimating u s motion picture exports because of the nature of the industry our approach shares some of the characteristics of earlier studies in which economies of scale and imperfect competition are present although early gravity models have focused on spatial distance some economists have interpreted the effects of distance as possibly nonphysical thus cultural distance applied to a culturally sensitive industry could be a reasonable interpretation for distance effects after using microdata to explore protectionist strategies we then aggregate these data for the formal model ii structure of the u s motion pictures industry why export what determines the structure and size of market for american films movie studios are both producers and distributors though movie studio revenues depend directly on net revenues gross revenues minus total costs the size and extent of the movies market remain tightly linked to gross revenue including domestic box office from the perspective of the studios aggregate market size s is 1 s n summation over i 1 r sub i x sub i where r sub i is gross domestic box office and x sub i is the u s dollar value of exports rentals video tapes of the ith of n movie studios

advertising media strategies in the film industry the primary aim of this article is to estimate the multiple determinants of film advertising expenditures in four important media namely television press outdoor and radio in the uk first television advertising the leading film advertising medium is examined as part of a system of equations capturing the interdependences between advertising the number of screens on which films are initially shown and box office revenues then a reduced form model is put forward to reveal the determinants of film advertising in the four media while major distribution companies have different preferences for the use of the alternative advertising media results highlight the importance of quality signals such as critical reviews in determining advertising expenditures in the film industry moreover advertising expenditures can themselves be considered to offer potential cinema goers signals of film quality

managerial objectives the r rating puzzle and the production of violent films we analyze project choice in the motion picture industry and find evidence consistent with revenue maximization and excessive hedging we find that movies that are very violent or feature sex and violence do not provide excess returns but they increase revenues particularly in the international market further they tend to lose money less often and their returns are more predictable even though there are never mega hits this evidence is consistent with studies of other industries and it partially explains the r rating puzzle that is the preponderance of r rated films although most studies find that g and pg rated films perform better

bose einstein dynamics and adaptive contracting in the motion picture industry audiences discover what films they like and spread the word information feedback produces bose einstein dynamics in the motion picture box office revenue distribution information cascades generate box office hits and flops the revenue distribution evolves recursively over the run as a mixture of the opening and a stochastic competition among films the motion picture run is decentralized adaptive and self organizing semistationary admission prices local information and contingency rich contracts match the film rental price and the supply of theatrical engagements to demand copyright 1996 by royal economic society

managing demand and sales dynamics in new product diffusion under supply constraint the bass diffusion model is a well known parametric approach to estimating new product demand trajectory over time this paper generalizes the bass model by allowing for a supply constraint in the presence of a supply constraint potential customers who are not able to obtain the new product join the waiting queue generating backorders and potentially reversing their adoption decision resulting in lost sales consequently they do not generate the positive word of mouth that is typically assumed in the bass model leading to significant changes in the new product diffusion dynamics we study how a firm should manage its supply processes in a new product diffusion environment with backorders and lost sales we consider a make to stock production environment and use optimal control theory to establish that it is never optimal to delay demand fulfillment this result is interesting because immediate fulfillment may accelerate the diffusion process and thereby result in a greater loss of customers in the future using this result we derive closed form expressions for the resulting demand and sales dynamics over the product life cycle we then use these expressions to investigate how the firm should determine the size of its capacity and the time to market its new product we show that delaying a product launch to build up an initial inventory may be optimal and can be used as a substitute for capacity also the optimal time to market and capacity increase with the coefficients of innovation and imitation in the adoption population we compare our optimal capacity and time to market policies with those resulting from exogeneous demand forecasts in order to quantify the value of endogenizing demand

do movie contents influence box office revenues abstractthis article studies the determinants of box office revenues in the motion picture industry we first adopt an approach that takes into account quality signals e g talent concentration movie budget and oscar awards among others to analyse the empirical relationship between category specific parenthood ratings r ratings and box office revenues then by matching movie contents with economic performance records our original approach reveals that offensive contents like profanity or nudity may be a hindrance to achieve economic returns while violent contents seems to enhance box office revenues further research is needed to clarify the interaction in this regard between production budget and movie contents

motion picture profit the stable paretian hypothesis and the curse of the superstar abstract this paper investigates the stable distribution as a model of profit in motion pictures the skew of this distribution and its paretian tails capture with great fidelity the statistics of the movies features of the business such as the nobody knows principle the curse of the superstar the angel s nightmare the instability of profit and the form of artist contracts follow from the properties of the stable distribution

auctions with constrained information blind bidding for motion pictures toward explaining why movie exhibitors have sought legislation requiring distributors to trade screen films before soliciting bids a simulation of a nash equilibrium in an auction suggests that without previews bidders may suffer losses i n expected utility this supports the hypothesis that risk aversion a nd competition render exhibitors unable to reduce their bids enough t o compensate fully for the dearth of information an error components model is used to analyze a unique industry dataset the results conf irm that a component of the bid is lower raising mean return while the variance of return is greater for blindly licensed films copyright 1988 by mit press

book value intertemporal pricing and quality discrimination in the us market for books abstract publishers produce books in hardcover and paperback versions with different prices and time of market introduction analysis of detailed book level data reveals that i price cost differentials cannot be explained by cost differences making this an example of quality discrimination ii market introduction time strongly affects sales suggesting that time is the crucial dimension of discrimination and iii there is substantial price rigidity across books and over time prices depend on cost shifters but not on demand shifters i discuss an explanation for this last finding in terms of the nature of demand in this market

cross country analysis of movie piracy we examine the rate of motion picture piracy across a sample of 26 diverse countries the level of piracy is explained empirically by the level of income the cost of enforcing property rights the level of collectivism present in a country s social institution and the level of internet usage the results of a cross country regression analysis indicate that piracy is increasing in the level of social coordination and the cost of enforcing property rights unrelated to income and decreasing in internet usage

quality signals in information cascades and the dynamics of the distribution of motion picture box office revenues abstract the movies are an ideal testing ground for information cascade models one can observe the dynamics of box office revenues from the opening to the end of the run to study the possibility that information cascades occur in the movies one has to incorporate the fact that agents can observe box office revenues as reported on the evening news and communicate word of mouth information about the quality of the movies they have seen one must consider many movies rather than the mere two choices assumed in information cascade models we develop an agent based model of information cascades with these extensions our objective is to see if the conclusions of information cascade models hold with these extensions they do not and to see if the agent based model can capture the features of the motion picture box office revenues it does

the influence of expert reviews on consumer demand for experience goods a case study of movie critics an inherent problem in measuring the influence of expert reviews on the demand for experience goods is that a correlation between good reviews and high demand may be spurious induced by an underlying correlation with unobservable quality signals using the timing of the reviews by two popular movie critics siskel and ebert relative to opening weekend box office revenue we apply a difference in differences approach to circumvent the problem of spurious correlation after purging the spurious correlation the measured influence effect is smaller though still detectable positive reviews have a particularly large influence on the demand for dramas and narrowly released movies

forecasting marketing mix responsiveness for new products abstract before a new product launch marketers need to infer how demand will respond to various levels of marketing mix variables to set an appropriate marketing plan a critical challenge in estimating marketing mix responsiveness from historical data is that the observed decisions were affected by private information possessed by managers about the heterogeneous effects of marketing mix variables on sales the authors refer to this as the slope endogeneity problem such endogeneity differs from the intercept endogeneity problem which has been widely acknowledged in the literature to correct for the slope endogeneity bias the authors develop a conceptually simple control function approach that is amenable to multiple endogenous variables and marketing mix carryover effects the method is applied to forecasting advertising responsiveness in the u s dvd market the results suggest that advertising responsiveness varies substantially across dvd titles and that estimated marketing mix elasticities w

the impact of discount rate changes on market interest rates evidence from three european countries and japan abstract this paper examines the impact of official discount rate odr changes on market interest rates of four countries germany france japan and the uk during the period from 1980 through 1997 the overall results indicate that short term rates are more responsive than long term rates for all countries the magnitude of the changes is country specific market rate responses are lower for germany and japan which have fewer changes in odr these results are consistent with expectations that there is less uncertainty under such regimes consistent with the pace of regulatory reforms the results of odr changes are strongest in uk and weakest in japan when monetary policy is changed or reversed interest rate responses are shown to be larger for countries with frequent changes in discount rates

a century of current account dynamics abstract recent globalization trends have refocused attention on the historical evolution of international capital mobility over the long run the issue is examined here using time series analysis of current account dynamics for fifteen countries since circa 1850 the inter war period emerges as an era of low capital mobility and only recently can we observe a tentative return to the degree of capital mobility witnessed during the late nineteenth century the analysis of saving and investment dynamics also helps make sense of the frequently observed high correlation of saving and investment rates in historical data

does hollywood make too many r rated movies risk stochastic dominance and the illusion of expectation we estimate the probability distributions of budgets revenues returns and profits to g pg pg13 and r rated movies the distributions are non gaussian and show a self similar stable paretian form with nonfinite variance and nonstationary mean the profit distributions have asymmetric tails which means that hollywood could trim its downside risk while increasing its upside possibilities by shifting production dollars out of r rated movies into g pg and pg13 rated movies stars who are willing to appear in edgy counterculture r rated movies for their prestige value may induce an illusion of expectation leading studios to green light movies that have biased expectations

moviemod an implementable decision support system for prerelease market evaluation of motion pictures in spite of the high financial stakes involved in marketing new motion pictures marketing science models have not been applied to the prerelease market evaluation of motion pictures the motion picture industry poses some unique challenges for example the consumer adoption process for movies is very sensitive to word of mouth interactions which are difficult to measure and predict before the movie has been released in this article we undertake the challenge to develop and implement moviemod a prerelease market evaluation model for the motion picture industry moviemod is designed to generate box office forecasts and to support marketing decisions for a new movie after the movie has been produced or when it is available in a rough cut but before it has been released unlike other forecasting models for motion pictures the calibration of moviemod does not require any actual sales data also the data collection time for a product with a limited lifetime such as a movie should not take too long for moviemod it takes only three hours in a consumer clinic to collect the data needed for the prediction of box office sales and the evaluation of alternative marketing plans the model is based on a behavioral representation of the consumer adoption process for movies as a macroflow process the heart of moviemod is an interactive markov chain model describing the macro flow process according to this model at any point in time with respect to the movie under study a consumer can be found in one of the following behavioral states undecided considerer rejecter positive spreader negative spreader and inactive the progression of consumers through the behavioral states depends on a set of movie specific factors that are related to the marketing mix as well as on a set of more general behavioral factors that characterize the movie going behavior in the population of interest this interactive markov chain model allows us to account for word of mouth interactions among potential adopters and several types of word of mouth spreaders in the population marketing variables that influence the transitions among the states are movie theme acceptability promotion strategy distribution strategy and the movie experience the model is calibrated in a consumer clinic experiment respondents fill out a questionnaire with general items related to their movie going and movie communication behavior they are exposed to different sets of information stimuli they are actually shown the movie and finally they fill outpostmovie evaluations including word of mouth intentions these measures are used to estimate the word of mouth parameters and other behavioral factors as well as the movie specific parameters of the model moviemod produces forecasts of the awareness adoption intention and cumulative penetration for a new movie within the population of interest for a given base marketing plan it also provides diagnostic information on the likely impact of alternative marketing plans on the commercial performance of a new movie we describe two applications of moviemod one is a pilot study conducted without studio cooperation in the united states and the other is a full fledged implementation conducted with cooperation of the movie s distributor and exhibitor in the netherlands the implementations suggest that moviemod produces reasonably accurate forecasts of box office performance more importantly the model offers the opportunity to simulate the effects of alternative marketing plans in the dutch application the effects of extra advertising extra magazine articles extra tv commercials and higher trailer intensity compared to the base marketing plan of the distributor were analyzed we demonstrate the value of these decision support capabilities of moviemod in assisting managers to identify a final plan that resulted in an almost 50 increase in the test movie s revenue performance compared to the marketing plan initially contemplated management implemented this recommended plan which resulted in box office sales that were within 5 of the moviemod prediction moviemod was also tested against several benchmark models and its prediction was better in all cases an evaluation of moviemod jointly by the dutch exhibitor and the distributor showed that both parties were positive about and appreciated its performance as a decision support tool in particular the distributor who has more stakes in the domestic performance of its movies showed a great interest in using moviemod for subsequent evaluations of new movies prior to their release based on such evaluations and the initial validation results moviemod can fruitfully and inexpensively be used to provide researchers and managers with a deeper understanding of the factors that drive audience response to new motion pictures and it can be instrumental in developing other decision support systems that can improve the odds of commercial success of new experiential products

new horizons or a strategic mirage artist led distribution versus alliance strategy in the video game industry abstract in this paper we contribute to the debate between researchers who argue that the emergence of online distribution allows content producers in the creative industries to bypass powerful publishers and distributors and other researchers who argue that this strategy cannot succeed without the complementary assets that these intermediaries provide we use a case study of the dutch video game developer dvgd bringing to market an identical game using two different but comparable distribution channels as a quasi experiment in the first release dvgd used online distribution to reach consumers directly whereas in the second it used an alliance with an established video game publisher we find that while the alliance required dvgd to share with the publisher a substantial fraction of the value appropriated by the game the alliance strategy resulted in greater absolute financial performance and relative market performance compared to the self publishing strategy we conclude that the differences in performance can be traced back to specialized complementary assets required for successful commercialization

the impact of mass migration on the israeli labor market mass migration from the former soviet union increased the israeli population by 12 in the first half of the 1990s this exodus was precipitated by the lifting of emigration restrictions in an unstable ussr and by the open immigration policy of israel toward soviet jews who faced more restrictive entry policies elsewhere i use this natural experiment to study the impact of immigration on the labor market outcomes of native israelis ols yields significant reductions in wages and small reductions in employment however ols is biased if the distribution of immigrants across occupations in israel was not exogenous to relative wage and employment conditions i instrument for the entry of russians into an occupation in israel using information on their former occupations in the ussr there is a significant positive correlation between the former presence of the immigrants in an occupation in the ussr and their presence in that occupation in israel but the previous occupational choices of russians abroad were independent of israeli wage and employment growth subsequent to their migration iv estimates indicate that immigration did not have an adverse impact on native israeli labor market outcomes

modeling hedonic portfolio products a joint segmentation analysis of music compact disc sales abstract the authors present a framework that enables researchers to differentiate better among a wide array of hedonic products specifically the authors define and discuss characteristics of hedonic portfolio products and offer a joint segmentation model that is appropriate for understanding the sales dynamics of this class of products the model offered in this article can accommodate a large degree of product heterogeneity through product clusters and model covariates the basic premise is that several generic consumer segments exist and remain fixed across all albums and each album or each cluster of similar albums can be viewed as drawing different proportions from each of these underlying segments the authors also allow explanatory variables to have a differential impact on both components of the model that is accelerating purchase rates within a consumer segment and changing the proportions drawn from each consumer segment by each product cluster thereby expanding or contracting the potentia

when to exit a product evidence from the u s motion picture exhibition market when is it optimal for a multi product firm to exit a product we analyze strategic product exit using data on motion pictures exhibition choices in a major metropolitan first run market to estimate the survivor function for films at a given theatre this analysis indicates that a film s survival at a particular theatre is affected by intra firm relative performance and interfirm competitive pressures we find that theatres within chains avoid business stealing preliminary analysis further suggests that theatres compete for market share with neighboring theatres by increasing the time to exit when the competing theatre is owned by a different chain this abstract was borrowed from another version of this item

bundling subscription tv channels abstract i analyze a market such as a subscription tv market where multiple varieties of an excludable public good are traded in bundles here bundling is not due to a producer s desire to extract consumers surplus but due to economies of scope in distribution technology the paper studies the pricing and production decisions of a supplier as well as the impacts of certain regulations such as pure bundling or pure components pricing restrictions findings of interest are as follows a profit constrained welfare maximizer would use a pure bundling price system when costs are low and a mixed bundling price system when costs are high a private monopolist produces too few varieties a pure bundling restriction on a private monopolist may increase welfare and consumer surplus but a pure components restriction never increases them

internet based virtual stock markets for business forecasting the application of internet based virtual stock markets vsms is an additional approach that can be used to predict short and medium term market developments the basic concept involves bringing a group of participants together via the internet and allowing them to trade shares of virtual stocks these stocks represent a bet on the outcome of future market situations and their value depends on the realization of these market situations in this process a vsm elicits and aggregates the assessments of its participants concerning future market developments the aim of this article is to evaluate the potential use and the different design possibilities as well as the forecast accuracy and performance of vsms compared to expert predictions for their application to business forecasting after introducing the basic idea of using vsms for business forecasting we discuss the different design possibilities for such vsms in three real world applications we analyze the feasibility and forecast accuracy of vsms compare the performance of vsms to expert predictions and propose a new validity test for vsm forecasts finally we draw conclusions and provide suggestions for future research

characteristics of buyers and renters of cultural goods the case of movies this article identifies the characteristics of consumers of movies watched on videotapes in their homes models of the frequency of movie video buying and renting by individuals are estimated using data from the spanish cultural consumption habits survey encuesta sobre habitos de consumo cultural this survey featured information about videotapes rented and bought in spain throughout 1998 applying a multinomial probit modelling framework this study analyses whether there are two different video markets renting and buying and any discernible socio economic characteristics for their respective consumers the influence of film genres on the renting of movie videotapes is also considered

network or pay per view a welfare analysis the welfare effects of pay per view television and advertising supported networks are compared it is shown that pay per view television admits third degree price discrimination and may involve a large loss of consumer surplus

the information content of discount rate announcements revisited cook and hahn 1988 have argued that discount rate change announcements were used by the federal reserve to signal market participants about movements in the federal funds rate throughout the 1973 79 federal funds rate targeting period they maintained that announced changes in the discount rate provided new information to market participants about subsequent actions of the federal reserve regarding the federal funds rate market participants understood these signals and used them to revise their expectations of the future path of the funds rate which also affected treasuw bill rates however roley and troll 1984 and smirlock and yawitz 1985 have argued that the federal reserve chose to implement policy changes exclusively through the federal funds rate during the funds rate targeting period hence the federal reserve s discount rate policy did not reveal any additional information and thus did not have an effect on market interest rates cook and hahn 1988 found evidence of discount rate announcement effects on bill rates in the pre october 1979 funds rate operating period while both roley and troll and smirlock and yawitz did not these three studies differed in several ways including their discount rate announcement classification procedures l mistiming of five event days 2 and diserent sample starting dates 3 as cook and hahn 1988 table 1 pp 170 171 published

silverscreener a modeling approach to movie screens management managing the allocation of shelf space for new products is a problem of significant importance for retailers the problem is particularly complex for exhibitors the retailers in the motion picture supply chain because they face dynamic challenges given the short life cycles of movies the changing level of demand over time the scarcity of shelf space and the complex revenue sharing contract between the exhibitor and the distributor in the face of this complexity the aim of current research is to provide a structure for analyzing management problems of exhibitors in the movie industry using a mathematical programming approach and a fast but readily accessible algorithm we propose a decision support model silverscreener whose aim is to help exhibitors make effective and timely decisions regarding theater screens management the major objective is to help select and schedule movies for a multiple screens theater over a fixed planning horizon in such a way that the exhibitor s cumulative profit is maximized by treating the multiple screens as parallel machines and the movies as jobs we provide an analogy of the current problem to the parallel machine scheduling problem we formulate the resulting problem as an integer program we depart from the typical parallel machine scheduling problems by introducing the time indexed formulation that is particularly useful for solving the current problem an important distinction between the current problem and typical machine scheduling problems is that the present approach allows for the choice of which movies to play typically in machine scheduling all jobs have to be scheduled we provide various analyses of normative versus actual decision making based on publicly available data the developed model is readily implementable and appears to lead to improved profitability in different comparative cases through sensitivity analysis we demonstrate that the above results are robust to variations in various parameters of the problem the main findings and insights from the normative policy suggest the following 1 based on silverscreener s recommendations the exhibitor can achieve substantially higher cumulative profit 2 the improvement over actual decisions in terms of profitability appears to result from a combination of better selection and scheduling of the movies 3 the general structure of the exhibitor s normative decision is choose fewer right movies and run them longer we propose a two tier integrated application of the model to show how the model can be applied to realistic decisionmaking the first tier involves development of a movie selection plan to help the manager plan an entire season and bid for movies before the start of that season an ex ante revenue prediction scheme is developed based intuitively on a matching of the forthcoming movies with similar movies played in this theater previously if the forthcoming season s scheduling plan can be visualized as a two dimensional week by screen matrix then that matrix contains only empty cells before the first tier after a bid plan is developed the exhibitor can fill some of those empty cells the remaining empty cells represent slots which can be decided during the season by either extending movies the exhibitor booked before the season or by scheduling other movies which may become available later in the season this motivates the second tier adaptive scheduling approach of the integrated approach the second tier helps the exhibitor in weekly decision making during the season this application involves rolling and updating data from one time window to another the approaches followed in the two tiers of the integrated application are quite general in that they can incorporate a sophisticated demand prediction model managerial judgments or a combination of both we also propose an alternative behavioral decision rule heuristic which exemplifies relationship dilemmas in the movie industry this heuristic shows that the exhibitors need to be selective in their choice of movies and may suffer a substantial loss in profitability if they place too much emphasis on accommodating distributors

the information content of discount rate announcements what is behind the announcement effect abstract a considerable volume of research shows that asset prices respond to changes in the federal reserve s discount rate while several competing hypotheses have been advanced to explain the market s response to discount rate announcements comparatively little effort has been made to differentiate among alternative hypotheses the result is an abundance of evidence establishing that asset prices respond to discount rate announcements but little if any agreement about why markets respond this article attempts to fill a void in the literature by pointing out how competing hypotheses differ and by constructing tests explicitly designed to differentiate among competing explanations the evidence suggests that the market s reaction to discount rate changes is purely an announcement effect i e a reaction to new information contained in the announcement that the direct effect of discount rate changes on market rates is nil that the announcement effect is invariant to the federal reserve s operating procedure and that generally speaking changes in the discount rate do not signal a change in monetary policy the announcement effect appears to vary with both the nature and extent of the information that the announcement of a discount rate change is believed to contain

waterfall versus sprinkler product launch strategy influencing the herd a seller decides the price and sequence in which a product of unknown value is introduced to consumers consumers inspect the product before consumption and observe past prices and sales consumption at a high price is informative for later consumers as it indicates that the product is likely to be of high value i show that on an average prices decrease over time however expected revenue on an average rises over time for a high enough discount factor i find that for extreme beliefs the firm introduces the product to all consumers but for intermediate values the product is introduced only to one consumer

something to talk about social spillovers in movie consumption we exploit the randomness of weather and the relationship between weather and moviegoing to quantify social spillovers in movie consumption instrumenting for early viewership with plausibly exogenous weather shocks captured in lasso chosen instruments we find that shocks to opening weekend viewership are doubled over the following five weekends our estimated momentum arises almost exclusively at the local level and we find no evidence that it varies with either ex post movie quality or the precision of ex ante information about movie quality suggesting that the observed momentum is driven in part by a preference for shared experience and not only by social learning

revenue sharing in movie exhibition and the arrival of sound i introduction at least since adam smith economists have been intrigued by share contracts there has been a proliferation of models most of which tend to explain the share contract as resulting from some mix of optimal risk bearing and optimal effort motivation 1 a large number of researchers have attempted to test these models empirically sharecropping contracts not surprisingly are the most intensively examined the bibliography in knoeber 2000 but similar studies have been conducted in many other areas for example martin 1988 and lafontaine 1992 examine franchise arrangements hallagan 1978 investigates contracts used to lease gold claims leffler and rucker 1991 analyze a sample of private timber sale contracts goldberg and erickson 1987 study long term contracts for the sale of petroleum coke aggarwal and samwick 1999 investigate incentive contracts between firms and their executives and chisholm 1997 goldberg 1997 and weinstein 1998 all examine profit sharing contracts between fi lm companies and the talent this article differs in an important respect from most previous studies which analyze a cross section of contracts in an attempt to determine how or whether they vary according to the attributes of the contracting parties or the products being contracted for instead it investigates an area where a sudden technology shock led to the rapid and widespread replacement of one form of contracting by another the industry is the motion picture business and the shock was the arrival of sound during the silent film era the vast majority of first run feature films were rented to cinemas for flat daily or weekly payments within two years of the release of the first sound picture revenue sharing contracts were the norm and they remain the norm to this day 2 my goal is to investigate the degree to which the standard economic concerns moral hazard risk sharing and measurement problems can explain this change because the contracting parties remained the same the question becomes what was altered in the nature of the product or in its provision so as to have altered correspondingly the incentives faced i conclude the following first the advent of sound fundamentally changed the inputs live music and other acts supplied by the exhibitor and central to the show were replaced by a soundtrack and short sound films supplied by the film company the benefit of deterring exhibitor shirking through the use of flat rental fees which made the exhibitor full residual claimant declined accordingly the party whose effort makes the largest contribution to marginal product generally receives the largest proportion of the residual claims and in the decades following the arrival of sound the proportion of residual claims collected by film companies rose steadily in addition average revenue per film increased with sound whereas the cost of ensuring that exhibitors reported attendance revenue honestly done by locating a film company s representative in the theater remained the same the ex post division of revenue necessary for revenue sharing thus became cheaper on a per film basis finally uncertainty ab out the value in terms of expected attendance revenue of the early sound films appears to have raised the cost of negotiating lump sum rental fees and thus promoted experiments with revenue sharing however although this may have contributed initially it cannot explain the practice s persistence uncertainty about film values declined as talking films became better known ii the nature of the problem a film company contracts with an exhibitor so that they may jointly produce the final good a movie presentation 3 to that end each supplies essential inputs the film company provides the movie itself assembled from a variety of inputs and some sort of national advertising support the exhibitor provides the theater which consists of seating projection equipment a refreshment stand and other support activities and some form of local advertising

modeling movie life cycles and market share we examine box office sales in the context of a market share model this is accomplished by developing a combination of a sliding window logit model and a gamma diffusion pattern in a hierarchical bayes framework we show that accounting for the full choice set available every week not only increases the fit of weekly movie sales but also leads to parameter estimates that depict a richer picture of the movie industry we show that movie studios appear to have a good understanding of the products they produce knowing when to support them and when not to we also show that the effect of the number of opening week screens is overestimated in traditional models our research indicates that actors have a direct and directors an indirect effect on consumers movie choice releasing a movie contemporaneously with other movies of the same genre adversely affects box office performance all around releasing a movie against movies of the same motion picture association of america mpaa rating hurts its sales in the beginning but there is a displacement effect which leads to a less severe sales loss in the long run

inexperienced and experienced players in an oligopolistic market game with minimal information we consider an oligopolistic market game in which the players are competing firms in the same market of a homogeneous consumption good the consumer side is represented by a fixed demand function the firms decide how much to produce of a perishable consumption good and they decide upon a number of information signals to be sent into the population in order to attract customers due to the minimal information provided the players do not have a well specified model of their environment given a simple mode of adaptive behavior which we showed in a previous paper explained the data relatively well our main objective here is to analyze whether experienced players behave differently to inexperienced players copyright 1999 by oxford university press

a stochastic model of superstardom an application of the yule distribution this study employs a stochastic model developed by g udny yule and herbert a simon as the probability mechanism underlying the consumer s choice of artistic products and predicts that artistic outputs will be concentrated among a few lucky individuals we find that the probability distribution implied by the stochastic model provides an excellent description of the empirical data in the popular music industry suggesting that the stochastic model may represent the process generating the superstar phenomenon because the stochastic model does not require differential talents among individuals our empirical results support the notion that the superstar phenomenon could exist among individuals with equal talent copyright 1994 by mit press

lifting the veil of secrecy from monetary policy evidence from the fed s early discount rate policy traditionally monetary policy has been conducted under a veil of secrecy in its landmark freedom of information act case the federal reserve argued that it needed to delay the disclosure of its policy decisions claiming that immediate disclosure would cause the market to react in a way that was inconsistent with the fed s intentions based on this argument and others the fed was permitted to delay the release of fomc policy decisions most economists however believe that market forces would work to keep equilibrium outcomes more in line with policy maker s intentions if policy makers would announce their intentions and establish a reputation for behaving in a manner consistent with them this paper tests the hypothesis that the market responds more closely to the fed s intentions when the fed makes its intentions known by investigating the market s reaction to a change in discount rate policy in the early 1960s we find that the market responded in a manner inconsistent with the fed s intentions when they were unknown and responds in a manner consistent with them when the fed made its intentions known

the economics of immigration this literature review concerns the impact of immigration on the economy of the host country focusing on the experience of the united states the emphasis is on the period from the 1970s to the 1990s the author shows that research earlier in this period generally concluded that the economic effects of immigration were positive but that more recent research on later migrations have generally concluded that immigration may be having an adverse effect on the earnings of native unskilled workers and be placing an increased burden on welfare programs the importance of such economic analysis for the formulation of appropriate migration policies is stressed

pricing an option on revenue from an innovation an application to movie box office revenue we develop a model for valuing revenue streams from innovations the stochastic properties of revenue from innovations create a more difficult environment in which to value options than when the underlying is a security there is no initial revenue and cumulative revenue cannot decrease revenues from innovations are characterized by different lives and different rates of the resolution of uncertainty a common deterministic model for predicting revenue from an innovation is known as the bass model we embed the bass model in a gamma process resulting in a stochastic process with moments proportional to the mean of the bass model to illustrate this model we choose the valuation of options on movie box office revenue these options enable film distributors to manage the risk of a movie and they offer diversification opportunities for investors we develop the econometric methodology for ex ante parameter estimation and a bayesian updating scheme using markov chain monte carlo simulation as data after release become available call prices obtained using the maximum likelihood ml parameter estimates from the full data set closely approximate the average discounted value of ex post call payouts that would have occurred at option maturity

what s an oscar worth this article examines the impact of an academy award nomination and award for best picture best actor actress and best supporting actor actress on a film s i market share of theaters ii average revenue per screen and iii its probability of survival the model is estimated using weekly box office data for a matched sample of nominated and non nominated films the results indicate substantial financial benefits for a nomination and award for best picture and best actor actress the structure of rewards is consistent with that found in two stage single elimination tournaments

models of technology diffusion abstract the literature on new technology diffusion is vast and it spills over many conventional disciplinary boundaries this paper surveys the literature by focusing on alternative explanations of the dominant stylized fact that the usage of new technologies over time typically follows an s curve the most commonly found model which is used to account for this model is the so called epidemic model which builds on the premise that what limits the speed of usage is the lack of information available about the new technology how to use it and what it does the leading alternate model is often called the probit model which follows from the premise that different firms with different goals and abilities are likely to want to adopt the new technology at different times in this model diffusion occurs as firms of different types gradually adopt it there are actually many ways to generate an s curve and the third class of models which we examine are models of density dependence popularized by population ecologists in these models the twin forces of legitimation and competition help to establish new technologies and then ultimately limit their take up finally we look at models in which the initial choice between different variants of the new technology affect the subsequent diffusion speed of the chosen technology such models often rely on information cascades which drive herd like adoption behaviour when a particular variant is finally selected

the impact of 1970s repatriates from africa on the portuguese labor market this paper examines the labor market effect of the retornados who immigrated to portugal from angola and mozambique in the mid 1970s following portugal s loss of its african colonies the retornados increased the portuguese labor force by roughly 10 in just three years two analyses suggest contrasting conclusions first comparisons of portugal with spain and france indicate that any adverse effect of the retornados was quantitatively swamped by the europe wide downturn in labor market conditions in the 1970s second comparisons between districts within portugal indicate that the retornados may have had a strong adverse effect on portuguese wages suggesting that immigration may be considerably more harmful than previous case studies have concluded the authors however regard the results of the within portugal analysis as less reliable than those of the comparison across countries

seasonality in the u s motion picture industry the observed seasonality of box office revenues reflects both seasonality in underlying demand for movies and seasonality in the number and quality of available movies i separately identify these aspects by estimating weekly demand for movies using movie fixed effects a long panel of movies weekly revenues and restrictions on their decay pattern i find that the estimated seasonality in underlying demand is much smaller and slightly different from the observed seasonality of sales the biggest movies are released at times when demand is highest amplifying the underlying seasonality price rigidities in the industry may facilitate this amplification effect

dynamic common agency and investment the economics of movie distribution i introduction the management of vertical relationships is one of the fundamental issues addressed by contract and organization theorists how do contract choices interact with other strategic choices what are the consequences of vertical integration answers to these questions inform management strategy and public policy this article analyzes vertical relationships and strategic behavior in the movie distribution market vertical relationships in dynamic environments have been neglected and this article is the first to analyze an infinite horizon common agency model that considers vertical integration and investment the model has two distributors studios or independent distributors and one exhibitor theater distributors can invest each period before contracting with the exhibitor a distributor s investment stochastically improves its movies the probability of having hits rises dynamic strategic interaction is particularly important in the movie business and the infinite horizon model explains several facts that cannot be addressed with a static or two period model 1 in the model distributors avoid simultaneous new hit releases and hits stay in the theater longer than flops in reality release timing and run lengths are critical choices distributors often adjust release dates to avoid competing head to head chisholm 1999 krider and weinberg 1998 reardon 1992 and run lengths depend on early performance de vany and eckert 1991 de vany and walls 1996 furthermore in equilibrium distributors appropriate the lion s share of the marginal value created by their hits this occurs because hits are rare and the exhibitor s next best alternative is to show worse movies this is consistent with real world exhibition contracts which use nonlinear revenue sharing rules that give distributors higher shares of ticket revenue when revenue is high filson et al 2005 vertical integration one distributor owning the exhibitor has implications for strategies and welfare although the article emphasizes the impacts on strategies the welfare analysis is useful because it addresses a historical debate the paramount decrees of the late 1940s and early 1950s barred distributors from owning theaters in the 1980s the u s department of justice gave distributors permission to forward integrate again several did so including some of the largest ones de vany and eckert 1991 argue that the courts erred in the original decrees but to date no formal model supports or refutes their arguments in the infinite horizon model vertical integration is privately profitable but lowers industry value the combined value of the two firms that merge rises because they appropriate value from the remaining distributor but suboptimal investment occurs so the combined value of all three firms falls additional results depend on how integration affects bargaining power if the independent distributor maintains its bargaining power then the integrated distributor increases its investment and further delays releasing its hits the integrated distributor uses its hits as threats to appropriate value from the independent distributor in response the independent distributor reduces its investment however total industry investment never falls and it rises for a wide range of investment costs higher industry investment causes more hits to reach the theater and consumer surplus rises as a result integration may improve welfare in contrast if the independent distributor loses all of its bargaining power after integration then it reduces its investment to zero the integrated distributor still increases its investment but industry investment and welfare falls other strategies also change for example the integrated distributor tends to show its own new hits in preference to the independent distributor s because it does not need to delay releasing its hits to appropriate value

factors determining uk album success this article uses a recently compiled dataset on the uk album sales to determine which factors contribute to best selling album sales success we control for factors including length of time since release nationality of artist artist type and album type testing the increasing returns to information hypothesis information on general public online review scores for the albums in the dataset allows for a strong test of the accuracy of online reviews in predicting music sales as online reviews are a relatively recent phenomenon while the release of many of the albums predates the widespread use of internet

a blueprint for success in the us film industry this article analyses motion picture box office gross revenue using a cross section of films from 1997 to 2001 the dependent variable is total domestic box office revenue the independent variables investigated include production budget peak number of screens that the film was shown on in theaters consumer price index for movie tickets personal income season and year of the release in theaters a measure of pre existing audience aggregate critic rating mpaa rating genre word of mouth recommendation the presence of popular stars and the award nominations a distinction is made in the analysis between information available to the public prior to the release of the film in theaters ex ante and information available to the public after the film opens in theaters ex post results for the ex ante ordinary least squares ols regression reveal positive impacts of budget summer and holiday release dates critical reviews sequels and several genres on gross revenue significant positive determina

demand and supply dynamics for sequentially released products in international markets the case of motion pictures we develop an econometric model to study a setting in which a new product is launched first in its domestic market and only at a later stage in foreign markets and where the product s performance demand and availability supply are highly interdependent over time within and across markets integrating literature on international diffusion success breeds success trends and the theatrical motion picture industry the focus of the empirical analysis we develop a dynamic simultanenous equations model of the drivers and interrelationship of the behavior of consumers audiences and retailers exhibitors our findings emphasize the importance of considering the endogeneity and simultaneity of audience and exhibitor behavior and challenge conventional wisdom on the determinants of box office performance which is predominantly based on modeling frameworks that fail to account for the interdependence of performance and availability specifically we find that variables such as movie attributes and advertising expenditures which are usually assumed to influence audiences directly mostly influence revenuesindirectly namely through their impact on exhibitors screen allocations in addition consistent with the idea that the buzz for a movie is perishable we find that the longer is the time lag between releases the weaker is the relationship between domestic and foreign market performance an effect mostly driven by foreign exhibitors screen allocations

consumer choice process for experience goods an econometric model and analysis in this research the authors develop and execute an econometric framework to model and analyze the consumer choice process for experience products formally the authors develop a multistage model

successful movies a preliminary empirical analysis summary our findings lend further support to existing informal evidence that the characteristics of successful films have changed over the past forty years moreover they also suggest that it may well be possible to develop empirical models relating a film s attributes to the likelihood of consumer demand unfortunately such analysis cannot be undertaken without access to more detailed information on the performance and features of individual movies given the interesting characteristics of movies as ideal examples of differentiated products and of the institutional arrangements governing their production and distribution such increased data availability would make this an exceptionally attractive area for applied micro economic research

the market for motion pictures rank revenue and survival i introduction on any given day in every major city there may from 50 to 100 motion pictures playing on theater screens each is unique and its producer hopes it will catch that bit of magic that lights up the screen and the box office yet few achieve this feat and most lead brief unpredictable lives each film competes for screens and audiences during its brief life against a changing array of imperfect and equally unique substitutes how is one to understand this market is there any sense in which this market could be called competitive and how is it organized what institutions and contracts are adapted to this market environment and how do they shape the results we seek to answer some of these questions by examining the relationship between contractual practices and motion picture hazard and survival distributions our modeling is based on a large sample of motion picture revenues and theater bookings during their theatrical runs our detailed sample of motion picture lifetimes is a rare look at this fascinating industry whose unusual and complex features challenge economic theory in interesting ways as smith and smith 1986 506 observe given the interesting characteristics of movies as ideal examples of differentiated products and of the institutional arrangements governing their production and distribution such increased data availability would make this an exceptionally attractive area for applied micro economic research much of the empirical work on the motion picture industry has focused on the attributes of successful movies smith and smith 1986 examined the impact of oscar awards on the cumulative rentals of movies released from the 1950s through the 1970s in more recent work nelson et al undated have quantified the value of an oscar award on movie revenues using a large panel of data and an event study methodology in a somewhat broader empirical study prag and cassavant 1994 examined the determinants of movie revenues and marketing expenditures they found that marketing expenditures and quality are important determinants of a film s success and that production cost star actors and awards are positively related to marketing expenses in the present paper we attempt to account for the dynamic patterns in the data because each film is unique and plays in its own way its life as a commercial product in the theatrical market is hazardous indeed most motion pictures have short and unpredictable lives because audiences must discover what they like and films compete against an ever changing cast of competitors for these reasons it is productive to use evolutionary models of survival and death to model the data 1 we model competition among films in the theatrical market as an evolving rank tournament of survival 2 motion pictures live and die in the box office tournament as they are challenged during their run by a randomly evolving cast of new competitors the challengers come from films previously released and from newly released films the contending films are ranked by film goers and those with high rank survive and are carried over to the next week low ranked films fail and are replaced by new contenders these attributes of the motion picture market contribute to increasing returns and give the box office revenue distribution the distinctive convex shape of a tournament prize distribution 3 the leading products command a disproportionate share of the market and they have longer runs even then a film s rank in the tournament is ephemeral and its life unpredictable in fact of any 10 major theatrical films produced on the average 6 or 7 are unprofitable and 1 will break even vogel 1990 29 ii the motion picture exhibition market once a film is produced it is distributed to theaters who exhibit it for audiences the distributor chooses a release pattern the number and location of theaters in which the film is booked or licensed to play

demographic and economic pressure on emigration out of africa two of the main forces driving european emigration in the late nineteenth century were real wage gaps between sending and receiving regions and demographic booms in the low wage sending regions our new estimates of net migration for the countries of sub saharan africa show that exactly the same forces driving african across border migration are at work today the results suggest that rapid growth in the cohort of potential young emigrants population pressure on the resource base and slow economic growth are likely to intensify the pressure for migration out of africa and into high wage oecd countries over the next two decades

on the wage growth of immigrants israel 1990 2000 this paper develops a descriptive methodology for the analysis of wage growth of immigrants that is based on human capital theory the sources of the wage growth are 1 the rise of the return to imported human capital 2 the impact of accumulated experience in the host country and 3 the mobility up the occupational ladder in the host country the model implies a nonlinear wage function that includes interactions between imported skills and local wage growth using data on native israelis and immigrants from the former soviet union of israel we estimate wage equations jointly for the two groups we find that upon arrival immigrants receive non return for imported skills in the ten years following arrival wages of highly skilled immigrants grow at 8 percent a year rising prices of skills occupational transitions accumulated experience in israel and an economy wide rise in wages account for 3 4 1 1 1 5 and 1 5 percent each in the long run the return for schooling converges to 0 027 substantially below the 0 069 return for natives we do not reject the hypothesis that the return for experience converges to that of natives and that immigrants receive a higher return for their unmeasured skills we find that there is some downgrading in the occupational distribution of immigrants relative to that of natives moreover the average wages of immigrants approach but do not converge to the wages of comparable natives the main reason for this is the low return to their imported skills jel j24 j31 j60