Strategic Attractiveness and Release Decision for Cultural Goods

TitleStrategic Attractiveness and Release Decision for Cultural Goods
Publication TypeJournal Article
Year of Publication2019
AuthorsBelleflamme, P, Paolini, D
JournalJournal of Economics & Management Strategy

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.  

KeywordsMotion pictures, nonprice competition, Strategic timing