An Auction Mechanism Considering Seat Reservations in Movie Theater Services

An Auction Mechanism Considering Seat Reservations in Movie Theater Services

Nariaki Nishino (The University of Tokyo, Japan), Koji Fukuya (The University of Tokyo, Japan) and Kanji Ueda (National Institute of Advanced Industrial Science and Technology and The University of Tokyo, Japan)
DOI: 10.4018/ijoci.2011010104
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Abstract

This paper proposes a new auction mechanism with seat reservations in movie theaters using an interdisciplinary approach. In movie theater services, the movie price is generally fixed, not depending on the quality of contents or the theater seat. It implies that such a service mechanism by fixed pricing might not reflect the value of movie contents. In this study, a new mechanism of theater services is proposed introducing the Vickrey–Clarke–Groves (VCG) mechanism and Gale–Shapley (GS) mechanism, which present effectiveness in the field of mechanism design. First derived is the theoretical predictions of equilibrium and how the mechanism works using experiments with human subjects. In addition, agent-based simulation is conducted using agents that make the decisions observed in the experiments. Consequently, the results present the validity of the proposed mechanism, showing an increase in the social surplus.
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Approach For Service Design

An interdisciplinary approach is said to be necessary for service design (Takenaka et al., 2009). This study specifically examines experimental economics, mechanism design, and agent-based simulation. Each topic and its relation of service design are explained in the following subsections.

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