Why are concessions like popcorn and candy bars so expensive at movie theaters? Is it due to price discrimination (the standard economic answer), to discrete-discontinuous demand (see this paper by Ricard Gil and Wesley Hartmann), to differentials in ticket prices (see chapter 4 of Richard McKenzie’s book on pricing puzzles), or to high clean up costs (the answer the economist Eric Helland once gave me)? Also, if economists cannot agree on the solution to this simple puzzle, what does this say about economics as a discipline? Bonus Question: Why is the popcorn sold at movie theaters so bad? Read more about this puzzle here (via Tyler Cowen at Marginal Revolution) and here (via Natasha Geiling at The Smithsonian).
- 153,734 hits
This work is licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License.
Blogs I Follow