Darlene C. Chisholm, Professor of Economics, Suffolk University, Boston, MA
The decision to drop a product from a multi-product line touches on two interrelated questions. How similar should a firm’s overall product line be to its competitors’ offerings? And which particular products should be added to and removed from the firm’s product line? Two competing firms can have a high degree of overall product similarity but make distinctly different choices about which individual products to add to, or eliminate from, their offerings, and when. We present empirical evidence on a firm’s decision to drop a product from a multi-product line, in a market with rapid product turnover, using weekly micro-level data from a major metropolitan movie market. While film offerings are broadly similar across the market studied, the timing for removing a specific film varies at the theater level.
The decision about when a film, showing at a movie theater, has reached the end of its selling life cycle, is different from most other goods. Compared to products sold at retail stores, such as local supermarkets, a film typically has a much shorter life cycle. The choice of when to replace a product, and what its replacement should be, is more frequent, and notably more central to a movie exhibitors’ weekly operations, than in many retail-store settings. We examine this choice in the context of the literature on product entry, exit, and differentiation and on related movie industry studies. We estimate the survival function for film duration, and propose an estimation strategy to address potential endogeneity. We identify the effects of chain ownership, intra-theater revenue performance, spatial market characteristics, the arrival of new film releases, and extensive theater and film characteristics on film longevity. This research is a collaboration with Yu-Hsi Liu (Shih-Hsin University) and George Norman (Tufts University).
Speaker bio
Darlene Chisholm is a Professor of Economics at Suffolk University, and specialises in empirical studies of cultural industries, with a focus on competition analysis of the motion-pictures industry. Professor Chisholm received her PhD in Economics from the University of Washington in Seattle, with fields of study in industrial organisation and applied microeconomic theory. Following completion of her degree, she was an Assistant and Associate Professor (with tenure) of Economics at Lehigh University until 2001, when she joined the Economics Department at Suffolk University in Boston. Professor Chisholm has held visiting positions at MIT, Tufts University, and Harvard.
Professor Chisholm’s research has examined: the impact of digitisation on the movie exhibition market; spatial competition in theatre location choice; product differentiation in film exhibition; and contractual agreements between actors and studios. Her work has been published in journals including the Journal of Law, Economics & Organization, Regional Science and Urban Economics, Journal of Cultural Economics, American Economic Review Papers & Proceedings, and International Journal of Industrial Organization.
She has served as a referee for journals including The RAND Journal of Economics, Review of Economics and Statistics, International Journal of Industrial Organization, Journal of Media Economics and as a reviewer for the National Science Foundation. Professor Chisholm also served as a member of the Editorial Board for the Journal of Cultural Economics (2010-2022).
For more information, please get in touch with Luke Slater.
Event timings
Date:
28 October 2022
Start Time:
12:30
End Time:
14:00