Bayesian information transmission and stable distributions: Motion picture revenues at the Australian box office

Recent empirical literature has identified the importance ofinformation transmission in creating box office blockbusters. It has been shown that box office revenue distributions are characterised by extremities of skew and variance that cannot be explained by such things as expensive budgets, star power, critical acclaim or awards. Empirical research of this industry has subsequently turned its attention to models of information transmission and the consequential implications for box office revenues. Using a large new Australian dataset, this paper adds to the literature by exploring the suitability of the α-stable distribution for various definitions of Australian box office revenues.