Risk sensitive scheduling strategies of production studios on the US movie market: An agent-based simulation

Abstract

The movie industry is a highly differentiated context where production studios compete in non-price product attributes, which influences the box office results of a motion picture. Because of the short life cycle and the constant entrance of new competitive products, temporal decisions play a crucial role. Time series of the number of movies on release and the sum of the box office results of the ten top motion pictures (ranked by box office result for that week) present a counterphased seasonality in the US movie market. We suggest that a possible reason is a risk sensitivity adaptation in the behaviour of the movie’s distributors. This paper provides a model supporting this hypothesis. We developed an agent-based model of a movie market, and we simulated it for 15 years. A comparable global behaviour exists when producers schedule the movies according to given risk-sensitive strategies. This research improves the knowledge of the US motion picture market, analyzing a real-world scenario and providing insight into the behaviour of existing firms in a complex environment.