The John M. Olin Center

Paper Abstract

337. Liran Einav and Barak Y. Orbach, Uniform Prices for Differentiated Goods: the Case of the Movie-Theater Industry, 10/2001; subsequently published as "Antitrust and Pricing in the Motion Picture Industry" by Barak Y. Orbach, in Yale Journal on Regulation, Vol. 21, No. 2, Summer 2004, 317-367.

Abstract: In any given movie theater, all movies are priced the same regardless of their theatrical success and potential and regardless of the general demand conditions. This phenomenon is an extreme example of the practice of uniform pricing of differentiated goods, for which traditional economic theories provide no explanation. This paper studies the case of the pricing practices in the movie-theater industry that appear to be inferior in comparison to alternative pricing policies. We examine various possible causes for the practice that may shed light on the persistence of such inefficient pricing policies.

337: PDF