The Effects of Shared Consumption on Advertising Effectiveness for Movies

Consumers frequently consume hedonic products together and make purchase decisions according to the presence of others. The authors hypothesize that the importance consumers attach to shared consumption influences the effectiveness of advertising in generating launch and post-launch sales. An empirically validated Agent Based Model (ABM) simulates how advertising expenditures accelerate and/or acquire demand in the motion picture market, and how shared consumption may strengthen or weaken these effects. The simulation results show that shared consumption strengthens the acquisition effect of advertising, especially at launch.