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Saturday, March 05, 2005

Why Are Tickets For Different Movies Priced The Same?

Tyler Cowan at Marginal Revolution uses an economist's perspective to examine a lot of cultural issues. Today, he asks the question "Why Are All Movies The Same Price?:

Well, not the same price in all cases. Before 6 p.m. is cheaper, there are numerous dollar theaters, and not all films allow for discount coupons. Nonetheless a multiplex will charge the same ($9.50 in my case) for the number one movie and for a flop. Nor is the price more expensive for Saturday night, or during the summer when demand is higher. Can any economic model predict these results?
He provides eight possible reasons. Click here for the whole posting.

Here's one I never would have come up with - a movie ticket is a call option! See why at Voluntary Exchange.

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