High School Musical 3: Senior Year's opening-weekend box office could depend on whether the Veblen effect comes into play. And maybe the Giffen Paradox, too, although that's less likely, as you well know.
Or maybe you don't well know. Join the club.
"There's just no precedent," says Exhibitor Relations box-office analyst Chad Hartigan.
Opening tomorrow, HSM3 is a theatrical sequel to a pair of Disney Channel movies. Will people—and by people, we mean 11-year-old girls—pay multiplex prices for a franchise they previously enjoyed for free—and by free, we mean it sure seemed free since Mom and Dad covered the cable bill?
This is where the Veblen effect comes in.
"Writing just over a century ago, the American economist Thorstein Veblen drew attention to the possibility that a certain kind of snobbishness might actually lead the amount demanded to rise as the price rose," says David George, professor of economics at La Salle University.
So, now that you have to pay $5, $6 or maybe more each time you want to be in the company of Zac Efron's Troy Bolton, you'll value him even more?
"I think that is correct," George says. "It could be true."
Veblen himself could not reach reached for comment on account of he's dead. Plus, he totally missed the first two movies.
New York-based economist John Dunham thinks the Giffen Paradox could pay off for HSM3, too. That theory holds, in apparent Veblen-style, that as a product's price "goes up, people want more of it," he says, although adding that it's more likely to work for Chanel handbags, than G-rated movies. (George thinks the Giffen Paradox really only worked for potatoes in Ireland during the potato famine.)
In any case, the downside to charging admission for a movie experience that only recently was free-ish is that, as Dunham reminds, "as something becomes more expensive, demand falls."
"How those forces play against each other is going to determine how the movie does," Dunham says.
Exhibitor Relations is guessing HSM3 could open anywhere from the low $30 millions to the low $50 millions, most likely landing smack in the middle: mid-$40 millions.
"But it's honestly a big question mark," says Hartigan.
What's not a question mark is where HSM3 will place in the box-office standings. Hartigan says the movie should easily bump Max Payne and open No. 1.
That's the indisputable theory of tween power.