Strategic Attractiveness and Release Decision for Cultural Goods

TitleStrategic Attractiveness and Release Decision for Cultural Goods
Publication TypeJournal Article
Year of Publication2018
AuthorsP. Belleflamme, D. Paolini
JournalJournal of Economics & Management Strategy
Volumefirstonline
Pagination1-27
Abstract

We study how producers of cultural goods can strategically invest in raising the attractiveness of their goods in order to secure the most profitable release dates. In a game‐theoretic setting, where two producers choose their investment expenditure before simultaneously setting the release date of their good, we prove that two equilibria are possible: releases are either simultaneous (at the demand peak) or staggered (one producer delays). In the latter equilibrium, the first‐mover secures its position by investing more in attractiveness. We test this prediction on a dataset of more than 1500 American movies released in 10 countries over 12 years. Results are consistent with the theoretical predictions, indicating that higher budget movies are released closer to seasonal demand peaks.  

URLhttps://onlinelibrary.wiley.com/doi/full/10.1111/jems.12280
DOI10.1111/jems.12280
KeywordsMotion pictures, nonprice competition, Strategic timing