Consumers as risk takers: evidence from the film industry during the 1930s

John Sedgwick, M. Pokorny

    Research output: Contribution to journalArticlepeer-review


    This paper examines the risk environment of film consumption in the United States during the 1930s when moviegoing dwarfed all other paid-for leisure activities. We argue that the wide variability i n the financial performance of films, reflecting the considerable risks that were involved in film production, can be interpreted as being mirrored in the risks incurred by consumers in the film consumption process. We further argue that production risk needs to be understood within the context of consumer risk. Using a dataset derived from the trade journal Variety, we examine the weekly fortunes of movies in first-run cinemas as consumers rapidly substitute movies that are currently on release for the promised pleasures of yet unseen movies. That expected utility was not always realised was commonplace, as was the pleasurable surprise that came with being thrilled by certain films. These are important results since, perhaps for the first time in modern society, they led to the emergence of the long right tail of consumer preferences for mass distributed goods.
    Original languageEnglish
    Pages (from-to)74-99
    Number of pages26
    JournalBusiness History
    Issue number1
    Publication statusPublished - Feb 2010


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