Wednesday, February 24, 2016
Why do movie theatres charge the same prices for good and bad movies?
An interesting post from our friends at Marginal Revolution, who come up with at least five possible explanations. My favorite is that it would require higher policing costs as people would buy cheap ticket and then sneak into the more expensive movies. I suspect that the most likely answer is that once a movie theatre realizes demand is low, they cannot lower the price to reflect demand because doing so would create incentives for patrons to wait past opening week, and then buy a discounted ticket.