Monday, May 25, 2009
Posted by D. Daniel Sokol
Enrico Böhme (Econ - Frankfurt Goethe University) and Christopher Müller (Econ - Frankfurt Goethe University) investigate a relationship between concentration and prices in Searching for the Concentration-Price Effect in the German Movie Theater Industry
ABSTRACT: This paper investigates whether a price-concentration relationship can be found on local cinema markets in Germany. First, we test a model of monopolistic pricing using a new set of German micro data and find no significant difference in admission prices on monopoly and oligopoly markets. In a next step, we test whether this can be explained by the existence of local monopolies, but find no hint of that. Implicit or explicit collusion among cinema operators might explain our observations.