CHEN WANG

Job Market Paper

 

“Strategic Genre and Budget Choices in the U.S. Film Industry”

 

Abstract: This paper assesses film makers' budget and genre choices in film production. My research is unique in that it exploits the peculiar lack of price variation in the film industry, as ticket prices are the same for each film. I construct a theoretical model of duopoly competition over genre and budget rather than the traditional focus on price. The model predicts that if the expected demand of the release week increases, the budgets of the films will increase. Also, the difference in budget and genre between the films will increase as expected demand increases. I empirically test these predictions using data on film release dates, budget, genre, and both expected and actual weekly number of tickets sold. The empirical findings confirm the predictions from the theory. If the expected demand of the release week increase by 1%, on average the budget of the films released that week increase by 0.66%, the difference in budget between the films will increase by 0.83%, and the genre similarity in percentage value will fall by 10.31 percentage points.

 

Research Papers in Progress

 

“Movie Release Date Competition and the Effect of Vertical Structure”