Arthur De Vany
Encyclopedia
Arthur De Vany is an American
economist
and author of a book on the economics of motion pictures titled: Hollywood Economics: How Extreme Uncertainty Shapes the Film Industry. Professor Emeritus of Economics at the University of California, Irvine
, he is listed in Who's Who in America and Who's Who in the World. He is the author of numerous books and publications, including The New Evolution Diet.
(UCLA) in 1963; his M.A. in Economics from UCLA in 1965; and his Ph.D. in Economics from UCLA in 1970. He also trained at the Legal Institute for Economists at Emory University
in 1982.
, skewness
, wildness and uncertainty
. Although his work spans various industries including water and energy, it is this work in analyzing the motion picture industry that remains his most definitive. His theses were collectively published in 2003 as Hollywood Economics: How Extreme Uncertainty Shapes the Film Industry. Using the motion picture industry's film budget and box office data provided by third-party information services such as Rentrak
and Variety
magazine, De Vany found that the historical relationship between a motion picture's cost and revenue converge to a group of stable distributions he describes as the Paretian distribution, i.e. the relationship between a motion picture's cost and revenue was wildly unpredictable compared to other investments.
In 1991, along with Ross Eckert, he published his Paramount Antitrust paper, an economic analysis of the landmark United States v. Paramount Pictures, Inc.
decision, in which he found historical and economic reasons for the practices that were challenged by the Department of Justice, and in which most of his key ideas were expressed far before he confirmed them statistically.
In 1996, along with W. David Walls, he published the Bose-Einstein paper in the Economic Journal. Using the Bose–Einstein statistics
concept used for quantum physics, he showed the complex convergence toward the Pareto distribution during the theatrical run and the way word-of-mouth drove a theatrical run's almost chaotic behavior. He was able to show that the film industry was able to adjust to such phenomena using adaptive, exhibition contracts and decentralizing decisions to be allocated to the local exhibitor through the hold-over and rental terms of the contract.
He also coined the phrase "superstar's curse" to describe the dilemma film producers face in hiring movie stars. Producers calculate the expected increase that a star will provide to a film's profit, then pay that star the difference. However, the returns of film are heavily skewed, such that the expected return (in statistical terms, the mean) is higher than the most common return (the mode). 80% of the time, the film will return less than the expected return. Thus, 80% of the time, the film will lose money.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
economist
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
and author of a book on the economics of motion pictures titled: Hollywood Economics: How Extreme Uncertainty Shapes the Film Industry. Professor Emeritus of Economics at the University of California, Irvine
University of California, Irvine
The University of California, Irvine , founded in 1965, is one of the ten campuses of the University of California, located in Irvine, California, USA...
, he is listed in Who's Who in America and Who's Who in the World. He is the author of numerous books and publications, including The New Evolution Diet.
Education
He earned his B.A. in Economics at the University of California, Los AngelesUniversity of California, Los Angeles
The University of California, Los Angeles is a public research university located in the Westwood neighborhood of Los Angeles, California, USA. It was founded in 1919 as the "Southern Branch" of the University of California and is the second oldest of the ten campuses...
(UCLA) in 1963; his M.A. in Economics from UCLA in 1965; and his Ph.D. in Economics from UCLA in 1970. He also trained at the Legal Institute for Economists at Emory University
Emory University
Emory University is a private research university in metropolitan Atlanta, located in the Druid Hills section of unincorporated DeKalb County, Georgia, United States. The university was founded as Emory College in 1836 in Oxford, Georgia by a small group of Methodists and was named in honor of...
in 1982.
Motion picture economics
De Vany is a widely-published researcher in motion picture economics, having created mathematical and statistical models of the dynamics of information to precisely describe the motion picture market in terms of kurtosisKurtosis
In probability theory and statistics, kurtosis is any measure of the "peakedness" of the probability distribution of a real-valued random variable...
, skewness
Skewness
In probability theory and statistics, skewness is a measure of the asymmetry of the probability distribution of a real-valued random variable. The skewness value can be positive or negative, or even undefined...
, wildness and uncertainty
Uncertainty
Uncertainty is a term used in subtly different ways in a number of fields, including physics, philosophy, statistics, economics, finance, insurance, psychology, sociology, engineering, and information science...
. Although his work spans various industries including water and energy, it is this work in analyzing the motion picture industry that remains his most definitive. His theses were collectively published in 2003 as Hollywood Economics: How Extreme Uncertainty Shapes the Film Industry. Using the motion picture industry's film budget and box office data provided by third-party information services such as Rentrak
Rentrak
The Rentrak Corporation, is an audience measurement company based in Portland, Oregon, United States. As of June 2009, Bill Livek is the company's chief executive officer.-History:...
and Variety
Variety (magazine)
Variety is an American weekly entertainment-trade magazine founded in New York City, New York, in 1905 by Sime Silverman. With the rise of the importance of the motion-picture industry, Daily Variety, a daily edition based in Los Angeles, California, was founded by Silverman in 1933. In 1998, the...
magazine, De Vany found that the historical relationship between a motion picture's cost and revenue converge to a group of stable distributions he describes as the Paretian distribution, i.e. the relationship between a motion picture's cost and revenue was wildly unpredictable compared to other investments.
In 1991, along with Ross Eckert, he published his Paramount Antitrust paper, an economic analysis of the landmark United States v. Paramount Pictures, Inc.
United States v. Paramount Pictures, Inc.
United States v. Paramount Pictures, Inc., 334 US 131 was a landmark United States Supreme Court anti-trust case that decided the fate of movie studios owning their own theatres and holding exclusivity rights on which theatres would...
decision, in which he found historical and economic reasons for the practices that were challenged by the Department of Justice, and in which most of his key ideas were expressed far before he confirmed them statistically.
In 1996, along with W. David Walls, he published the Bose-Einstein paper in the Economic Journal. Using the Bose–Einstein statistics
Bose–Einstein statistics
In statistical mechanics, Bose–Einstein statistics determines the statistical distribution of identical indistinguishable bosons over the energy states in thermal equilibrium.-Concept:...
concept used for quantum physics, he showed the complex convergence toward the Pareto distribution during the theatrical run and the way word-of-mouth drove a theatrical run's almost chaotic behavior. He was able to show that the film industry was able to adjust to such phenomena using adaptive, exhibition contracts and decentralizing decisions to be allocated to the local exhibitor through the hold-over and rental terms of the contract.
He also coined the phrase "superstar's curse" to describe the dilemma film producers face in hiring movie stars. Producers calculate the expected increase that a star will provide to a film's profit, then pay that star the difference. However, the returns of film are heavily skewed, such that the expected return (in statistical terms, the mean) is higher than the most common return (the mode). 80% of the time, the film will return less than the expected return. Thus, 80% of the time, the film will lose money.
Evolutionary fitness
De Vany has been working on the concept of evolutionary fitness. He outlines his approach in his book, The New Evolution Diet: What Our Paleolithic Ancestors Can Teach Us about Weight Loss, Fitness, and Aging, which was published in December 2010. His ideas about fitness include a diet and fitness regime that promotes a more random behavior that mimics the natural way ancestral people lived in place of the steady and regular eating and exercise that are the norm in Western societies. He follows a diet that mimics the diet of ancient humans during the Paleolithic period with carefully selected modern foods such as vegetables, lean meat and seafood, fresh fruits and nuts. He also advocates glucose restriction and intermittent fasting as methods to turn down the aging pathways.Career
- Co-founder and Chief Scientist, Extremal Film Partners, Santa Monica, CA, 2007-.
- Member, Evolution, Complexity and Cognition Group, Free University of Brussels, 2010-.
- Professor of Economics and member of Institute for Mathematical Behavioral Sciences, University of California, Irvine, CA, 1984-2003.
- Associate, Center for Computable Economics, UCLA, 1995-1998.
- Professor, University of Houston, University Park, Houston, Texas, 1981–1984.
- Professor, Simon Fraser University, Burnaby, B. C., Canada, 1980–1981.
- Fellow, University of Chicago, Center for the Study of the Economy and the State, and the Law School, Chicago, Illinois, 1978–1979.
- President and cofounder, Resources Research Corporation, College Station, Texas, 1977–1979.
- Professor, Department of Economics, Texas A&M University, College Station, Texas, 1977–1979.
- Associate Professor, Texas A&M University, Department of Economics, College Station, Texas, 1971–1977.
Published research papers on motion picture economics
- De Vany, Arthur. Uncertainty, waiting time and capacity utilization—a stochastic theory of product quality. Journal of Political Economy, 84: 523–541, 1976.
- De Vany, Arthur. Contracting in the movies when “nobody knows anything”. In Victor Ginsburg, editor, Proceedings of the Rotterdam Conference on Cultural Economics, North-Holland (forthcoming 2003).
- DeVany, Arthur S. and Cassey Lee. Motion pictures and the stable Paretian hypothesis. IMBS working paper, University of California at Irvine, 2000.
- De Vany, Arthur S. and Cassey Lee. Quality signals in information cascades and the dynamics of the distribution of motion picture box office revenues. Journal of Economic Dynamics and Control, 25: 593–614, 2001.
- De Vany, Arthur S. and Ross Eckert. Motion picture antitrust: the Paramount cases revisited. Research in Law and Economics, 14: 51–112, 1991.
- De Vany, Arthur and Hank McMillan. Markets, hierarchies, and antitrust in the motion picture industry. Working paper, Economics Department, University of California, Irvine, 1993.
- De Vany, Arthur S. and W. David Walls. Innovation tournaments: an analysis of rank, diffusion and survival in motion pictures. Paper presented, NBER Conference on New Products, Cambridge, MA, 1993.
- De Vany, Arthur S. and W. David Walls. Bose–Einstein dynamics and adaptive contracting in the motion picture industry. The Economic Journal, 439(106): 1493–1514, 1996.
- De Vany, Arthur S. and W. David Walls. The market for motion pictures: Rank, revenue and survival. Economic Inquiry, 4(35): 783–797, November 1997.
- De Vany, Arthur S. and W. David Walls. Private information, demand cascades and the blockbuster strategy. IMBS working paper, University of California at Irvine, 2000.
- De Vany, Arthur and W. David Walls. Does Hollywood make too many R-rated movies? Risk, stochastic dominance, and the illusion of expectation. Journal of Business, 75(3): 425–451, April 2002.
- De Vany, Arthur and W. David Walls. Motion picture profit, the stable Paretian hypothesis, and the curse of the superstar. Journal of Economic Dynamics and Control, 2002.
- De Vany, Arthur and W. David Walls. Quality evaluations and the breakdown of statistical herding in the dynamics of box office revenues. IMBS working paper, University of California at Irvine, 2002.
- De Vany, Arthur S. and W. David Walls. Uncertainty in the movie industry: does star power reduce the terror of the box office? Journal of Cultural Economics, 23(4): 285–318, November 1999.