Question

Why do economists think up so many pricing puzzles about the movies (don’t answer that, it is rhetorical)? We used to ask why popcorn costs so much more at the movies. Indeed there is an entire book written about that very question! I used to ask the following pricing puzzle: “Why do movie theaters in South Korea often have reserved seating while movie theaters in the United States not offer reserved seating?” It was first-come first-served. Well, now I need to ask an entirely new question … why? Well, now movie theaters in the United States are beginning to offer, en masse, reserved seating at movies. So, here is your puzzle: why do American movie theaters NOW have assigned seating whereas in the past they did not?

Answer 1

FCFS to reserved system