Price discrimination among ticket service classes is analyzed when aggregate demand is known and individual preferences are private information. Serving customers in cheap second-class seats limits the seller's ability to extract surplus from expensive first-class seats because some switch to the lower class. Discrimination is greatest in the class with the largest variance in demand prices. The seller's incentives to limit substitution by altering the between-class quality spread and the pricing of complementary (concession) goods are also analyzed. These issues depend on comparing "marginal" with "average" customers parallel to the provision of public goods. Finally, when capacity limitations require sequential servicing of buyers in "batches" (for example, theatrical productions), intertemporal price discrimination requires prices to decline over time, so customers with the greatest demand prices buy higher-priced tickets to earlier performances rather than wait for later performances. The rational policy can generate queues for early performances. Copyright 1997 by the University of Chicago.
Download Info
To our knowledge, this item is not available for
download. To find whether it is available, there are three
options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page
whether it is in fact available.
3. Perform a search for a similarly titled item that would be
available.
Volume (Year): 40 (1997) Issue (Month): 2 (October) Pages: 351-76 Download reference. The following formats are available: HTML
(with abstract),
plain text
(with abstract),
BibTeX,
RIS (EndNote, RefMan, ProCite),
ReDIF
Handle: RePEc:ucp:jlawec:v:40:y:1997:i:2:p:351-76
Contact details of provider: Postal: The University of Chicago Press, Journals Division, P.O. Box 37005 Chicago, IL 60637 Fax: (773) 753-0811 Email: Web page: http://www.journals.uchicago.edu/JLE/
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)
Miller, Nolan & Piankov, Nikita & Zeckhauser, Richard, 2001.
"When to Haggle,"
Working Paper Series
rwp01-025, Harvard University, John F. Kennedy School of Government.
[Downloadable!]