Research on the Evaluation of the Box Office Investment Value Based on the “Nash Equilibrium” Theory: Taking Romantic Film as an Example

Citation

Tang, Peng. (2022). Research on the evaluation of the box office investment value based on the “Nash Equilibrium” theory: Taking romantic film as an example. (Master’s independent study). Bangkok: Siam University.

Abstract

The film industry plays a crucial role in the national economy, presenting significant investment opportunities as a promising sunrise industry. However, film investment is inherently high-risk and has posed challenges to investors. Despite notable successes, the overall return on film investment remains less optimistic, with approximately 90% of domestic films experiencing financial losses. This prevailing situation leads to considerable capital wastage, hinders effective fund allocation, and impedes the industry’s development. This study addresses the root cause of these challenges, attributing them to investors’ lack of understanding of film products and the absence of scientific and feasible evaluation methods, particularly in the context of China’s romantic films. The “Nash Equilibrium” theory was employed to assess the investment value of films, utilizing variables such as box office income, estimated release schedule, intellectual property (IP), and film genre as critical factors.

The research findings revealed that the quality of the script, the director, and the actors significantly impact the investment value of a film, and the film genre also notably influences the evaluation of investment value. Additionally, films released during the prime scheduling period showed favorable publicity conditions, thereby positively influencing the investment value of the films. This study contributes to the field by providing valuable insights into evaluating investment value in the film industry, specifically in the context of China’s romantic films. Applying the “Nash Equilibrium” theory is a practical approach to guide investors to make informed decisions. By understanding the significance of script quality, directorial expertise, actor selection, film genre, and release timing, investors can enhance their understanding of the investment potential and mitigate risks, ultimately fostering a more effective and sustainable film investment landscape.

Keywords: romantic movie box office, Nash equilibrium, investment value, film industry.

Master of Business Administration (International Program), Siam University, Bangkok, Thailand