Product Line Rivalry: How Box Office Revenue Cycles Influence Movie Exhibition Variety
Darlene C. Chisholm
We analyze how product line rivalry by multi-product oligopolists is affected by market product substitutability. We show that the width and degree of overlap in competing lines is determined by the tension between two effects: the drive to “be where the demand and the desire to weaken competition and intra-firm product cannibalization. Product shown to be wider and more overlapped in large markets and when product substitutability weak. We provide econometric support for our main hypotheses using data on weekly programming choices by first-run movie theatres in a large US metropolitan market.
Product line rivalry; market size; product substitutability; movie exhibition
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