Common Contracts

Chia-Wei Kuo

October 19th, 2016

• Filed
  October 19th, 2016

Abstract. In the film supply chain, a multi-period revenue-sharing contract is usually adopted. Such contract specifies how to divide the box office revenue between the film distributors and exhibitors. We consider a film supply chain composed of one distributor and one exh ibitor (theater) that sign a two-period revenue-sharing contract with periodically adjusted sharing ratio. The distributor provides a contract with specified revenue- sharing ratios in the two periods, and the e xhib itor decides the number of movie screening for each period. In the first period, both parties are uncertain regarding the potential box office performance of the movie (high or low in our model). After the first period, the box office performance is realized. If the box office performance is low, then the theater may adopt promotional efforts to stimulate the revenue and decides the number of movie screening in the second period. In this case, the distributor determines the sharing ratio of the promotio