188 research outputs found
Racial Bias in Expert Quality Assessment: A Study of Newspaper Movie Reviews
Newspaper critics' movie reviews are often used by potential movie viewers as signals of expert quality assessment. In this paper, we assess if there is any racial bias in these critics' reviews, and if so, what impact these biases have on viewer demand. To do this, we develop a dataset that tracks ratings from 68 popular movie critics for 566 movies released in the U.S. between 2003 and 2007. The data also include measures of movie production costs, marketing expenditures, type of movie (i.e. genre, MPAA rating, etc.), actor and director quality measures, audience tastes and critics' gender, experience and race. Despite inclusion of all these controls for movie quality and other drivers of critic ratings, we find that ratings for movies with a black lead actor and all white supporting cast are approximately 6% lower than for other racial compositions. These results appear consistent with implicit discrimination. Using estimates of the impact of critics' ratings on movie revenues, we find that lower critic ratings for black lead-white support movies translate into lost revenues of up to 4% or about $2.57 million on average. In sum, prejudice concerning race roles (e.g., the race of the leader versus supporters/followers) can have a direct impact on critic quality assessment, and thereby alter market outcomes.racial bias, quality assessment, expert ratings, movies
Is Dual Agency in Real Estate Transactions a Cause for Concern?
We study dual agency in residential real estate, where the same agent/agency represents both the buyer and seller. We assess the extent to which dual agency suffers from an inherent conflict of interest, where the dual agent furthers the interest of one client at the expense of the other clientâs, as well as principal-agent incentive misalignment where the agent furthers her own interest at the expense of one or both clients. And, we examine how these incentive conflicts affect agent behavior and transaction outcomes. To do so, we analyze 10,891 residential real estate transactions in Long Island, NY, from 2004- 2007. Specifically, we (i) identify how dual agency is correlated with house prices and time-to-sale, (ii) describe and assess agent behaviors that could generate these correlations, and (iii) provide some intuition as to the economic effects of prohibiting dual agency in real estate transactions. We find that the incidence of dual agency is uncorrelated with sale price and negatively correlated with time-to-sale. However, on very fast deals, list prices and sale prices are significantly higher on houses sold via dual agency. These findings are consistent with first-resort selling (agents first showing houses to in-house buyer clients) and strategic pricing (agents inducing their seller clients to set a higher list price in anticipation of an internal client agreeing to it) on some deals, in conjunction with agents leaning on sellers to accept a lower sale price on other deals. First-resort selling is indicative of incentive misalignment, while the latter two behaviors reflect a conflict of interest: strategic pricing transfers surplus from the buyer to the seller, and leaning on the seller transfers surplus from the seller to the buyer. Further, our results indicate little difference between dual-agent (same agent) and within-agency (same agency, but different agent) deals. Our findings provide some evidence of distorted outcomes associated with dual agency, mainly on fast deals, but the evidence indicates mild overall effects, suggesting that prohibiting the practice is not likely to substantially increase welfare.
Entry Deterring Capacity in the Texas Lodging Industry
We test whether capacity is used to deter entry and whether the amount invested in entry deterring capacity is related to market concentration and market presence. We use a unique dataset containing all lodging properties in Texas from 1991 through 1997. For each of the 3,830 properties, we have information on occupancy rate, number of rooms, location and ownership. This information is augmented by market level information such as tax rates, travel expenditures and retail wages. We find that there is higher investment in capacity relative to demand (i.e. idle capacity) in markets with larger Herfindahl index and by firms with larger share of market capacity. These results are consistent with the entry deterrence literature that suggests firms in more concentrated markets and firms with larger market share have greater incentive to invest in entry deterring capacity
Forecasting in Rapidly Changing Environments: An Application to the US Motion Picture Industry
The competitive dynamics of new DVD releases
Ministry of Education, Singapore under its Academic Research Funding Tier
The exploration of hotel reference prices under dynamic pricing scenarios and different forms of competition
The reference price, used by consumers to evaluate market prices, has tremendous relevance in dynamic pricing. Reconciling current heterogeneous theories and studies on reference prices, this paper analyzes the impact of hotel price sequences on consumersâ reference prices through a lab and a field experiment. Experiment 1 tests the importance of retrospective price evaluations, while Experiment 2 evaluates the impact of three forms of competition: (i) simultaneous behavior, where firms adjust prices simultaneously; (ii) leader-follower behavior, where one firm acts as the leader; and (iii) independent behavior, where each player takes its rivalâs strategy as given and seeks to maximize its own profits. The results show that consumers decrease their reference price when competing hotels adjust their prices simultaneously. Relevant managerial implications are drawn for the hospitality industry, which is affected by the presence of online travel agencies that announce the daily rates offered by each competitor
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