Simulating the Cinema Market: How Cross‐Cultural Differences in Social Influence Explain Box Office Distributions

Abstract

This paper uses a mixed method approach to show how cross-cultural differences in social influences can explain differences in distributions of market shares in different markets. First, we develop a realistic agent-based model that mimics the behavior of movie visitors and incorporates the social influences visitors exert on each other before and after visiting movies. The simulation results indicate that market inequalities are determined by social influences. In particular, we find that the social influence derived from the intended behaviors of others (coordinated consumption effect) has a stronger effect on market inequalities than the social influence derived from the past behavior of others (imitation effect). Second, we empirically validate the simulation results by conducting a crossnational survey that makes use of the cross-cultural differences in Hofstede's collectivism-individualism index as a proxy for the level of social influence present in a market. The results of this field study, performed in China, the Netherlands, Italy, and Spain, empirically show that social influences differ across countries, and that these differences can explain the apparent differences in the dispersion of movies' market shares. The empirical survey further contributes to understanding the role of social influence by revealing a U-shaped relationship between Hofstede's collectivism-individualism index score and the degree of social influence.

Agent-based simulation of innovation diffusion: a review

“…An application to the motion picture market is put forth by Broekhuizen et al (2011). Using an ABM, they show that cross-cultural differences in social influence cause market inequalities and validate these results with survey data from China, the Netherlands, Italy, and Spain.…”

Charts and demand: Empirical generalizations on social influence

“…Furthermore, small and coincidental agglomerations of demand can attract cascades of customers and reduce predictability of market outcomes. These results are an important foundation for many recent marketing publications (e.g., Broekhuizen, Delre, & Torres, 2011;Chen, Wang, & Xie, 2011;Kuksov & Wang, 2013;Tucker & Zhang, 2011). They are also of timely interest for marketing practice since new social media and e-commerce sites often provide information on sales ranks for various product categories (e.g., amazon.com, iTunes).…”

Signaling effects and the role of culture: movies in international auxiliary channels

“…For information-based influence, consumers' attitudes towards the movie are either reinforced or converted due to the diagnostic information provided by individuals or a minority group. Consumers make more informed and accurate decisions due to the help of others (Broekhuizen et al, 2011).…”