Cheap Tuesdays and the demand for cinema

• Autores: Nicolas de Roos, Jordi McKenzie
• Localización: International journal of industrial organization, ISSN 0167-7187, Vol. 33, Nº. 1, 2014, págs. 93-109
• Idioma: inglés
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• Resumen

  • 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.