Box‐Office Demand: The Importance of Being #1

18 Pages Posted: 7 Jun 2016

See all articles by Luis M. B. Cabral

Luis M. B. Cabral

New York University (NYU) - Leonard N. Stern School of Business - Department of Economics; Centre for Economic Policy Research (CEPR)

Gabriel Natividad

Universidad de Piura

Date Written: June 2016

Abstract

We propose a theoretical framework to understand the effect on a movie's eventual theatrical success of leading the box office during the opening weekend. We consider two possible channels: a positive shock to the utility from watching the movie and a greater awareness of the movie's existence. We derive a series of testable predictions, which we test on U.S. box office data. The results suggest that being #1 in sales during the opening weekend has an economically and statistically significant effect on the movie's total demand; and that the primary channel for this effect is through the greater awareness induced by being #1.

Suggested Citation

Cabral, Luis M. B. and Natividad, Gabriel, Box‐Office Demand: The Importance of Being #1 (June 2016). The Journal of Industrial Economics, Vol. 64, Issue 2, pp. 277-294, 2016. Available at SSRN: https://ssrn.com/abstract=2791213 or http://dx.doi.org/10.1111/joie.12095

Luis M. B. Cabral (Contact Author)

New York University (NYU) - Leonard N. Stern School of Business - Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States
212-998-0858 (Phone)
212-998-4218 (Fax)

HOME PAGE: http://www.stern.nyu.edu/~lcabral

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Gabriel Natividad

Universidad de Piura ( email )

Calle Martir Olaya 162
Lima, Lima L18
Peru

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