To Review or Not to Review? Limited Strategic Thinking at the Movie Box Office

Alexander Lindale Brown (), Colin F. Camerer and Dan Lovallo

American Economic Journal: Microeconomics, 2012, vol. 4, issue 2, pages 1-26

Abstract: Film studios occasionally withhold movies from critics before their release. These cold openings provide a natural setting to apply laboratory-developed models of limited strategic thinking to the field. In a set of 1,303 widely released movies, cold opening is correlated with a 10-30 percent increase in domestic box-office revenue, and a pattern of fan disappointment, consistent with the hypothesis that some moviegoers do not infer low quality from cold opening. While selection and endogeneity may play a role in these regressions, the full pattern of results is consistent with level-k and cognitive hierarchy behavioral-game-theoretic models. (JEL D12, D82, L82, M37)

JEL-codes: D12 D82 L82 M37 (search for similar items in EconPapers)
Date: 2012
Note: DOI: 10.1257/mic.4.2.1
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