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The Strategic Effects of Vertical Market Structure: Common Agency and Divisionalization in the US Motion Picture Industry
Author(s) -
Corts Kenneth S.
Publication year - 2001
Publication title -
journal of economics and management strategy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.672
H-Index - 68
eISSN - 1530-9134
pISSN - 1058-6407
DOI - 10.1111/j.1430-9134.2001.00509.x
Subject(s) - industrial organization , studio , vertical integration , market structure , scheduling (production processes) , competition (biology) , upstream (networking) , film industry , business , downstream (manufacturing) , economics , microeconomics , marketing , operations management , engineering , telecommunications , art , visual arts , ecology , movie theater , biology
I examine the release‐date scheduling of all motion pictures that went into wide release in the US in 1995 and 1996 to investigate the effects of vertical market structure on competition. The evidence suggests that complex vertical structures involving multiple upstream or downstream firms generally do not achieve efficient outcomes in movie scheduling. In addition, analysis of the data suggests that the production divisions of the major studios act as integrated parts of the studio, rather than as independent competing firms.