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Ticket Pricing

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Author Info

  • Rosen, Sherwin
  • Rosenfield, Andrew M

Abstract

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.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Law & Economics.

Volume (Year): 40 (1997)
Issue (Month): 2 (October)
Pages: 351-76

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Handle: RePEc:ucp:jlawec:v:40:y:1997:i:2:p:351-76

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Web page: http://www.journals.uchicago.edu/JLE/

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Cited by:
  1. Ashenfelter, Orley, 1980. "Unemployment as Disequilibrium in a Model of Aggregate Labor Supply," Econometrica, Econometric Society, vol. 48(3), pages 547-64, April.
  2. Dong C. Won & Young H. Lee, 2008. "Optimal dynamic pricing for sports games with habitual attendance," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(8), pages 639-655.
  3. Courty, Pascal & Pagliero, Mario, 2009. "Price Discrimination in the Concert Industry," CEPR Discussion Papers 7143, C.E.P.R. Discussion Papers.
  4. Alan Krueger, 2004. "The Economics of Real Superstars: The Market for Rock Concerts in the Material World," Working Papers 863, Princeton University, Department of Economics, Industrial Relations Section..
  5. Ricard Gil & Wesley Hartmann, 2007. "The Role and Determinants of Concession Sales in Movie Theaters: Evidence from the Spanish Exhibition Industry," Review of Industrial Organization, Springer, vol. 30(4), pages 325-347, June.
  6. Kendall, Todd D., 2008. "Durable good celebrities," Journal of Economic Behavior & Organization, Elsevier, vol. 66(2), pages 312-321, May.
  7. Ricard Gil, 2006. "Demand Shifts and Changes in Competition: Evidence from the Movie Theatre Industry," International Journal of the Economics of Business, Taylor and Francis Journals, vol. 13(3), pages 407-428.
  8. Pascal COURTY, 2000. "An economic guide to ticket pricing in the entertainment industry," Discussion Papers (REL - Recherches Economiques de Louvain) 2000024, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  9. Volker Nocke & Martin Peitz, 2004. "Monopoly Pricing under Demand Uncertainty: Final Sales versus Introductory Offers," PIER Working Paper Archive 04-027, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  10. Miller, Nolan & Piankov, Nikita & Zeckhauser, Richard, 2001. "When to Haggle," Working Paper Series rwp01-025, Harvard University, John F. Kennedy School of Government.
  11. Phillip Leslie & Alan Sorensen, 2009. "The Welfare Effects of Ticket Resale," NBER Working Papers 15476, National Bureau of Economic Research, Inc.
  12. W. Walls, 2010. "Superstars and heavy tails in recorded entertainment: empirical analysis of the market for DVDs," Journal of Cultural Economics, Springer, vol. 34(4), pages 261-279, November.
  13. Gil, Ricard & Hartmann, Wesley R., 2008. "Why Does Popcorn Cost So Much at the Movies? An Empirical Analysis of Metering Price Discrimination," Research Papers 1983, Stanford University, Graduate School of Business.

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