Economic effects of vertical disintegration: the American motion picture industry, 1945 to 1955

Gregory Mead Silver

Economic History Working Papers from London School of Economics and Political Science, Department of Economic History

Abstract: In 1948, the United States Supreme Court declared the operations of eight of the nation’s largest motion picture studios in violation of the 1890 Sherman Antitrust Act. The decision ordered them to disintegrate their producer-distributor roles from cinemas. The Court believed this would promote competitive practices in a hitherto uncompetitive industry. However, these desired benefits were not entirely reached. Instead, by leading the Hollywood studio system to collapse, the Court also distorted the supplychain for motion pictures. This work utilizes Coasian analyses of transaction costs to show that institutional integration was an efficient structure for the motion picture industry. It explores the motives to integrate and the benefits it garnered. Having laid this groundwork, it then assesses the effects theatre divorcement had on the industry and offers plausible counterfactuals had the studios remained intact after 1948.

JEL-codes: L82 N0 (search for similar items in EconPapers)
Pages: 126 pages
Date: 2010-11
New Economics Papers: this item is included in nep-com, nep-his, nep-hme and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:wpaper:30043

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