Publication Type
Journal Article
Version
acceptedVersion
Publication Date
8-2018
Abstract
We study the market for new (movie) DVDs in the United States. Our demand model captures seasonality, freshness (i.e., time between theatrical and DVD release), and state dependence. We also develop a structural model of dynamic competition in which studios balance waiting for high-demand weeks, against reduced freshness, and against competitive crowding. We find that studios emphasize DVD revenues from larger movies (by theatrical revenue) over DVD revenues from smaller movies. Studios also emphasize revenue from consumers who prefer larger and fresher movies. These behaviors are consistent with managerial conservatism: studio executives forgo DVD revenues from smaller movies to ensure the DVD success of larger movies.
Keywords
dynamic competition, time-nonhomogeneous Markov perfect equilibrium, release timing, motion picture industry, managerial conservatism
Discipline
Marketing | Sales and Merchandising
Research Areas
Marketing
Publication
Management Science
Volume
64
Issue
8
First Page
3536
Last Page
3553
ISSN
0025-1909
Identifier
10.1287/mnsc.2017.2795
Publisher
INFORMS (Institute for Operations Research and Management Sciences)
Citation
MUKHERJEE, Anirban and KADIYALI, Vrinda.
The competitive dynamics of new DVD releases. (2018). Management Science. 64, (8), 3536-3553.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/5968
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1287/mnsc.2017.2795