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Economic effects of vertical disintegration: the American motion picture industry, 1945 to 1955

Silver, Gregory Mead (2010) Economic effects of vertical disintegration: the American motion picture industry, 1945 to 1955. Economic History Working Papers, 149/10. Department of Economic History, London School of Economics and Political Science, London, UK.

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Abstract

In 1948, the United States Supreme Court declared the operations of eight of the nation’s largest motion picture studios in violation of the 1890 Sherman Antitrust Act. The decision ordered them to disintegrate their producer-distributor roles from cinemas. The Court believed this would promote competitive practices in a hitherto uncompetitive industry. However, these desired benefits were not entirely reached. Instead, by leading the Hollywood studio system to collapse, the Court also distorted the supplychain for motion pictures. This work utilizes Coasian analyses of transaction costs to show that institutional integration was an efficient structure for the motion picture industry. It explores the motives to integrate and the benefits it garnered. Having laid this groundwork, it then assesses the effects theatre divorcement had on the industry and offers plausible counterfactuals had the studios remained intact after 1948.

Item Type: Monograph (Working Paper)
Official URL: http://www2.lse.ac.uk/economicHistory/workingPaper...
Additional Information: © 2010 Gregory Mead Silver, LSE
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
P Language and Literature > PN Literature (General) > PN1993 Motion Pictures
Sets: Departments > Economic History
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 149/10
Date Deposited: 24 Nov 2010 14:39
URL: http://eprints.lse.ac.uk/30043/

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