Digitization has led to dramatic cost reductions and reshaped both what and how products are sold. This dissertation examines the impact of digitization on the behavior of market intermediaries that bring together producers and consumers. Our empirical context is the transition from 35mm film to digital cinema technologies in the South Korean movie industry during the period of 2006-16. Using detailed data on theaters' daily scheduling decisions, we focus on changes in two aspects of theaters' assortments decisions: product variety and supply concentration. Our results from various empirical analyses suggest the followings. (1) Overall, digitization helps theaters provide consumers with more variety of movies (increased product variety), but it also leads theaters to disproportionately concentrate the supply of screens towards blockbuster movies (increased concentration). (2) The effects are moderated by two supply-side factors: technology compatibility and capacity constraint. In particular, a limited availability of movies in a compatible format can have a negative impact on product variety for early adopters. Also, the effects vary across different sizes of theaters. (3) The effects are also moderated by demand. A theoretical model and empirical test demonstrate that the effects varies by demand fluctuations across weekend evening (i.e., peak demand) vs.~other time slots. The increase in supply concentration is limited to weekend evening time slots. In other time slots, there is a decrease in supply concentration. Product variety increases in all time slots except for weekend evenings. Overall, this dissertation provide evidence that digitization affect market intermediaries' assortment decisions by enhancing flexibility in distribution, but its impact is moderated by both supply- and demand-side factors. The rest of the dissertation is organized as follows. In Chapter 1, we briefly review prior studies on digitization, focusing on its impact on product variety and concentration. In Chapter 2, we describe the institutional features of our empirical context, the South Korean movie market, and present a series of exploratory data analyses. In Chapter 3, we develop a theoretical model of theaters' scheduling decisions, which predicts the moderating role of demand. In Chapter 4, we assess the impact of digitization on product variety and supply concentration. We also empirically test the model predictions from Chapter 3. Chapter 5 concludes.

Creator

• Yang, Joonhyuk

DOI

• https://doi.org/10.21985/n2-mvce-w662

Subject

• Marketing
• Economics

Language

• en

Alternate Identifier

• etdadmin_upload_736303
• http://dissertations.umi.com/northwestern:15056

Keyword

• Product Variety
• Concentration
• Digitization

Date created

• 2020-01-01

Resource type

• Dissertation

Rights statement

• In Copyright