​Selected Working Papers: 

Price variation across films with differing characteristics in the Chinese cinema industry

Price rigidity for differentiated movies has long puzzled economists because the lack of variation in prices makes estimating demand for movies difficult. In this paper, I estimate a demand equation for movies by using data from a typical large urban market in China that features substantial, high-frequency variation in both price and box office sales across films, screening times, and auditoriums. Our two-level nested logit model captures the key market details—especially price variation—that determine the market share of a movie, and it sheds light on the implications of price decisions.

Measuring the market expansion, business stealing, and cannibalisation effects of new product entries

I empirically measure the impact of new movie releases using detailed entry data across cinemas from a typically large urban market in China. I identify and measure three primary effects following the release of new movies: market expansion of the entire industry, business stealing across different cinemas, and cannibalisation of movies within a cinema. I find that differentiated product entry in the movie exhibition industry has a strong market expansion effect, weak cannibalisation, and modest business stealing effects, implying that the extensive release of new movies increases industry profits and expands consumer choice.

Entry, exit, expectations, and performance over the product life cycle

I study the optimal timing of product switching for a multiproduct firm using extensive and detailed entry and exit data from the Chinese movie market. I depict a movie’s life cycle as exhibiting a descending-step shape. A survival analysis reveals that the length of a movie's life correlate with both firm- and firm-product attributes, and cinemas dynamically adjust their expectations of a movie to match its performance. The termination of an old movie is signaled by the entry of new movies and low occupancy of 10%. The results provide empirical insights on s strategic decisions of product reselection and resource reallocation.

Screening Out Pollution: Analyzing the Impact of Pollution on the Life Cycle of Movies 

(with Yilan Luo) 

The field of pollution research has primarily focused on individuals' avoidance behavior. This study contributes to the existing literature by investigating the impact of air pollution on the averting strategy of firms with a specific focus on the cinema industry. Utilizing a detailed high frequency dataset from Beijing during 2013 to 2014, we analyze the relationship between air pollution and the duration of movies. The results of our survival analysis reveal a negative effect of air pollution on movie duration, with a hazard ratio of 1.195. This implies that a 100-point increase in air quality index (AQI) is associated with a 19.5% higher risk of a movie's termination on a given day. Notably, our findings demonstrate that pollution not only increases the hazard ratio for movies to enter its first low occupancy stage but also significantly raises the hazard ratio of termination for movies that have already reached this stage. Additionally, we observe this negative impact to be particularly prominent for low-quality movies and imported movies. Our research provides empirical evidence on the influence of air pollution on the averting strategy of multi-product firms and emphasizes the necessity for effective policies or measures to assist businesses in adapting and mitigating climate risks.

Selected Working in Progress

Chun Yi "The Impact of Time and Day on Consumer Choice"