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Competitive strategies in the motion picture industry: An ABM to study investment decisions


Delre, Sebastiano Alessio; Panico, Claudio; Wierenga, Berend (2017). Competitive strategies in the motion picture industry: An ABM to study investment decisions. International Journal of Research in Marketing, 34(1):69-99.

Abstract

We study a parsimonious competition setting whereby two studio producers launch their movies simultaneously. They compete deciding about the positioning of their movies, as they can position close to or far from the mainstream, and investing in advertising and in quality. We study our competitive setting with an analytical model and solve it using a standard game-theoretical technique. Next, we use an agent-based model (ABM) to relax several assumptions of the analytical model and investigate more realistic market situations, such as symmetric as well as asymmetric positioning, competitions among big and/or small studios, settings with more than two competitors, and studios that use weighted and evolving decision rules. Our results explain interesting dynamics behind the scenes of the competition. They indicate the drivers of studios' behaviors and shed light on some important aspects of their strategic competition. In this sense, our results offer relevant theoretical and practical implications.

Abstract

We study a parsimonious competition setting whereby two studio producers launch their movies simultaneously. They compete deciding about the positioning of their movies, as they can position close to or far from the mainstream, and investing in advertising and in quality. We study our competitive setting with an analytical model and solve it using a standard game-theoretical technique. Next, we use an agent-based model (ABM) to relax several assumptions of the analytical model and investigate more realistic market situations, such as symmetric as well as asymmetric positioning, competitions among big and/or small studios, settings with more than two competitors, and studios that use weighted and evolving decision rules. Our results explain interesting dynamics behind the scenes of the competition. They indicate the drivers of studios' behaviors and shed light on some important aspects of their strategic competition. In this sense, our results offer relevant theoretical and practical implications.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
08 Research Priority Programs > Social Networks
Dewey Decimal Classification:330 Economics
Language:English
Date:March 2017
Deposited On:03 Apr 2019 15:24
Last Modified:05 Apr 2019 08:56
Publisher:Elsevier
ISSN:0167-8116
OA Status:Green
Publisher DOI:https://doi.org/10.1016/j.ijresmar.2016.05.005

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