27-59

• Georgikopoulos, Nikolaos I.
• Βουδούρης, Κώστας

The aim of this paper is to establish probabilistic statements of how the post-opening consumption decisions of individuals depend on information they receive from their peers during the opening week by using box-office data for movies released in the US market in the 1990s and 1930s. In doing so, we quantify how the post-opening demand dynamics depend on the opening power that the market at these instances dictate by proposing a smooth and non-parametric model. An understanding of the demand dynamics and adaptive supply arrangements of the motion picture industry is presented. The movie market is particularly interesting due to its skewed and kurtotic macro-regularity, which resulted in the hypothesis, that ‘nobody knows what makes a hit or when it will happen’. This hypothesis is revised here. Finally, we also find evidence of strong interaction among consumers, as one would expect information to spread,because of the multiplicative error properties of the proposed semi-parametric model. This implies the existence of a ‘social multiplier’ when quality is ex-ante uncertain.

• Economics and Business
• Media and communications

• Οικονομία

Box-office revenues, Non-parametric model, The Box-Cox Power Exponential distribution, Generalised Additive Models for Location Scale and Shape (GAMLSS), Demand dynamics

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