Strategic Promotion and Release Decisions for Cultural Goods

Paul Belleflamme and Dimitri Paolini

Working Paper CRENoS from Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia

Abstract: We study how producers of cultural goods can strategically increase their promotion budgets to secure the most profitable release dates for their goods. In a game-theoretic setting, where two producers choose their budget before simultaneously setting the release date of their good, we prove that two equilibria are possible - releases are either simultaneous (at the demand peak) or staggered (one producer delays). In the latter equilibrium, the first-mover secures its position by investing more in promotion. We test this prediction on a dataset of more than 1500 American movies released in ten countries over 13 years. Our empirical analysis confirms that higher budgets allow movie studios to move release dates closer to demand peaks.

Keywords: Non-price competition; Strategic promotion; Strategic timing; Motion pictures (search for similar items in EconPapers)
JEL-codes: L13 L82 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-com, nep-cul and nep-ind
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Citations: View citations in EconPapers (10)

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Working Paper: Strategic Promotion and Release Decisions for Cultural Goods (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:cns:cnscwp:201508

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