The Consumer's Rent vs. Buy Decision: The Case of Home-Video
Speaker
Abstract
The home video market represents more than $24 billion business. Increasing interest has turned to how consumers decide whether to rent or buy a particular movie title. In this paper, we develop and test empirically two behaviorally different models, capturing the consumer's decision to rent or buy a given title. We utilize a unique transaction data set obtained from a large video store chain to estimate relevant parameters and make inferences about the rent/buy behavior of individuals and the rentability/purchasability of movies. We use these estimates to demonstrate how the home video’s retailer could generate customized purchase prices for consumers, based on their transaction histories.
Contact information:
Dr. K. Gielens
