Simulating the Motion Picture Market: why do the hits take it all?

Why are shares of the motion picture market so unequally distributed? Do the different qualities of the movies account for such an enormous difference in the market shares? Are mass media campaigns so effective to convince almost all movie visitors to see the same movies? Or are there social processes that affect the movie visitors’ decision making and direct them to visit the same movies? In this paper we propose an agent based model based on micro movie goers decision-making that generates the observed macro characteristics of the market. The model is calibrated using a survey conducted on movie goers and it explains the stylized characteristics of the market in terms of social influence and coordinated consumption. Simulation results indicate that (1) the chances for successful movies to become a hit are higher in entertainment consumption markets than in art consumption markets and (2) if the marketing efforts of movie labels increase, then market shares become more unequally distributed and the differences between the two markets tend to disappear. Contact: Sebastiano A. Delre Faculty of Economics, University of Groningen, Groningen, The Netherlands. Tel: +31 (0)50 3634459 Email: [email protected]