An Auction Mechanism Considering Seat Reservations in Movie Theater Services

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.