Resource title

Dynamic Common Agency, Vertical Integration, and Investment : The Economics of Movie Distribution

Resource image

image for OpenScout resource :: Dynamic Common Agency, Vertical Integration, and Investment : The Economics of Movie Distribution

Resource description

This paper analyzes the impact of vertical integration on investment and other strategies in a dynamic common agency framework. Movie distribution is used as a motivating example. The model matches several facts about movie distribution; distributors avoid head-to-head new hit releases, hits have longer runs than flops, and distributors receive the lion?s share of value generated by hits. Welfare comparisons show that integration is privately profitable and may improve social welfare even though it reduces industry profits. The effects of integration on strategies and welfare depend critically on how integration affects the bargaining power of the non-integrated firm.

Resource author

Darren Filson

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/23382

Resource license

Adapt according to the presented license agreement and reference the original author.