In April $2001,$ Matt Heyman, co$-$founder of Cinemex, the largest chain of movie theaters in Mexico

City, looked out the window of his office and pondered the future of his company. In just seven years,

Heyman and his partners had nurtured Cinemex from a student idea into the largest theater chain in

Mexico City, but they faced new challenges every day. Many of these challenges came from

competitors. For years, competitors ran old and poorly maintained theaters, but in recent months they

had begun to imitate Cinemex$$s top$-$of$-$the$-$line exhibition venues. Their latest tactic: offering two

tickets for the price of one on Wednesdays. Heyman wondered whether Cinemex should offer a

similar deal, or instead rely on the Cinemex brand and hold the line on price.