Vertical Restraints in the Movie Exhibition Industry.

摘要

This paper analyzes vertical restraints imposed by distributors on movie theaters in the movie exhibition industry. It focuses on two restraints, which together act as a form of exclusive dealing: minimum exhibition period and no screen-sharing. Two questions are asked: what is the welfare cost of these restraints, and is lifting them an equilibrium outcome for the distributors? A structural model of industry demand and supply is estimated using a uniquely detailed panel data set of attendance and movie rental contracts collected directly from a sample of US exhibitors. Counterfactual results indicate lifting the restraints would result in an increase in consumer welfare, exhibitor and distributor profits of 3.9% to 17.1%, 5.6% to 20.3% and 1.8% to 10.1%, respectively. Restraints are likely to persist, however, because distributors face a prisoner's dilemma and do not have unilateral incentives to lift them. Instead, a policy banning restraints might be necessary to realize the gains in welfare.