We saw The Fantastic Mr Fox a few weeks ago. It was a thoroughly entertaining movie and I highly recommend it. But this is not a movie review. Instead I am thinking about movie previews and why we all subject ourselves to sitting through 10-plus minutes of previews.
The movie is scheduled to start at the top of the hour, but we all know that what really starts at the top of the hour are the previews and they will last around 10 minutes at least. Why don’t we all save ourselves 10 minutes of time and show up 10 minutes late?
Maybe you like to watch previews but I don’t and in any case I can always watch them online if I really want to. I will assume that most people would prefer to see fewer previews than they do.
One answer is that the theater will optimally randomize the length of previews so that we cannot predict precisely the true starting time of the movie. To guarantee that we don’t miss any of the film we will have to take the chance of seeing some previews. But my guess is that this doesn’t go very far as an explanation and anyway the variation in preview lenghts is probably small.
In fact, even if the theater publicized the true start time we would still come early. The reason is that we are playing an all-pay auction bidding with our time for the best seats in the theater. Each of us decides at home how early to arrive trading off the cost of our time versus the probability of getting stuck in the front row. The “winner” of the auction is the person who arrives earliest, the prize is the best seat in the theater, and your bid is how early to arrive. It is “all pay” because even the loser pays his bid (if you come early but not early enough you get a bad seat and waste your time.)
In an all pay auction bidders have to randomize their bids. Because if you knew how everyone else was bidding you would arrive just before them and win. But then they would want to come earlier too, etc. The randomizations are calibrated so that you cannot know for sure when to arrive if you want to get a good seat and the tradeoffs between coming earlier and later are exactly balanced.
As a result most people arrive early, sit and wait. Now the previews come in. Since we are all going to be there anyway, the theater might as well show us previews. Indeed, even people like me would rather watch previews than sit in an empty theater, so the theater is doing us a favor.
And this even explains why theater tickets are always general admission. Let’s compare the alternative. The theater knows we are “buying” our seats with our time. The theater could try to monetize that by charging higher prices for better seats. But it’s a basic principle of advertising that the amount we are willing to pay to avoid being advertised at is smaller than the amount advertisers are willing to pay to advertise to us. (That is why pay TV is practically non-existent.) So there is less money to be made selling us preferred seats than having us pay with our time and eyeballs.