Deterministic Adoption in Movie Industry

Ch'ng Kean Siang and Hooi Hooi Lean

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, we investigate the decision making process by movie goers. Under incomplete information environment, movie goers will have to learn the quality of the movie from the information relayed by predecessors. The hypothesis is formed by the movie goers when the movie is first released, and it is then compared to information received. In this environment, movie goers will constantly upgrade the belief system, or discard the weaker ones if found to be not consistent with the overall quality information received. Thus, positive news relayed in the initial stage will be magnified to greater importance; the movie becomes a hit. We model this deterministic adoption with first order difference equation. We find that the Hit movies exhibit higher deterministic adoption behavior and the relationship between current and previous adoptions can last longer, than if the movie is a flop. The time path or orbit of the dynamic growth also exhibits non-oscillatory behavior and converge to equilibrium level quickly; when the deterministic adoption mechanism loses its strength, the subsequent adoptions will eventually die off. In other words, the previous adoptions cannot determine the future adoptions. Although this behavior is present in both Hit and Non-hit movies, this diminishing mechanism is triggered in much earlier stage in Non-hit movies than it is in Hit movies.

Keywords: deterministic adoption; learning; movie; consumption behavior (search for similar items in EconPapers)
JEL-codes: D01 L82 (search for similar items in EconPapers)
Date: 2007-10
New Economics Papers: this item is included in nep-cul
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/8019/1/MPRA_paper_8019.pdf original version (application/pdf)

Related works:
Working Paper: Deterministic Adoption in Movie Industry (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:8019

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().