Spatial competition and market share: an application to motion pictures |
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| Authors: | Darlene C Chisholm George Norman |
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| Institution: | 1. Department of Economics, Suffolk University, 8 Ashburton Place, Boston, MA, 02108, USA
2. William and Joyce Cummings Family Chair of Entrepreneurship and Business Economics, Department of Economics, Tufts University, 8 Upper Campus Road, Medford, MA, 02155, USA
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| Abstract: | This paper presents an empirical assessment of movie-theatre attendance in two major metropolitan markets and provides strong support for the importance of spatial characteristics in determining attendance. We consider the hypothesis that attendance at a particular movie theatre reflects a tension between two effects: a negative competition effect and a positive agglomeration effect. We find evidence that the competition effect dominates. Further, we identify a pattern of systematic spatial decay in the impact of this effect on demand. |
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