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The Impact of Price Discrimination on Revenue: Evidence from the Concert Industry

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  • Pascal Courty
  • Mario Pagliero

Abstract

Concert tickets can either be sold at a single price or at multiple prices corresponding to different seating categories. We study the relationship between price discrimination and revenue by examining variations in the number of seating categories across concert, tour, artist, location, and time. Offering multiple seating categories leads to revenues that are approximately 5 percent higher than with single price ticketing. The return to price discrimination is higher in markets with more heterogeneous demand, in smaller venues and in more competitive markets. The return of increasing from three to four categories of seating is about half that of increasing from one to two.

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Bibliographic Info

Paper provided by Collegio Carlo Alberto in its series Carlo Alberto Notebooks with number 105.

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Length: 42 pages
Date of creation: 2009
Date of revision:
Handle: RePEc:cca:wpaper:105

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Keywords: Price discrimination; return to price discrimination; second degree price discrimination;

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References

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  1. Phillip Leslie, 2004. "Price Discrimination in Broadway Theater," RAND Journal of Economics, The RAND Corporation, vol. 35(3), pages 520-541, Autumn.
  2. Marie Connolly & Alan Krueger, 2005. "Rockonomics: The Economics of Popular Music," Working Papers 878, Princeton University, Department of Economics, Industrial Relations Section..
  3. Armstrong, Mark, 2006. "Price discrimination," MPRA Paper 4693, University Library of Munich, Germany.
  4. Courty, Pascal & Pagliero, Mario, 2009. "Price Discrimination in the Concert Industry," CEPR Discussion Papers 7143, C.E.P.R. Discussion Papers.
  5. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
  6. Verboven, Frank, 1999. "Product Line Rivalry and Market Segmentation--With an Application to Automobile Optional Engine Pricing," Journal of Industrial Economics, Wiley Blackwell, vol. 47(4), pages 399-425, December.
  7. Edward L. Glaeser & Jed Kolko & Albert Saiz, 2000. "Consumer City," Harvard Institute of Economic Research Working Papers 1901, Harvard - Institute of Economic Research.
  8. Alan Sorensen & Phillip Leslie, 2007. "Ticket Resale," 2007 Meeting Papers 527, Society for Economic Dynamics.
  9. Eugenio J. Miravete & Lars-Hendrik Röller, 2003. "Estimating Markups under Nonlinear Pricing Competition," CIG Working Papers SP II 2003-21, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
  10. Aviv Nevo & Catherine Wolfram, 2002. "Why Do Manufacturers Issue Coupons? An Empirical Analysis of Breakfast Cereals," RAND Journal of Economics, The RAND Corporation, vol. 33(2), pages 319-339, Summer.
  11. Pascal Courty, 2003. "Some Economics of Ticket Resale," Journal of Economic Perspectives, American Economic Association, vol. 17(2), pages 85-97, Spring.
  12. Heckman, James J. & Robb, Richard Jr., 1985. "Alternative methods for evaluating the impact of interventions : An overview," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 239-267.
  13. Meghan Busse & Marc Rysman, 2005. "Competition and Price Discrimination in Yellow Pages Advertising," RAND Journal of Economics, The RAND Corporation, vol. 36(2), pages 378-390, Summer.
  14. Holbrook, Morris B & Schindler, Robert M, 1989. " Some Exploratory Findings on the Development of Musical Tastes," Journal of Consumer Research, University of Chicago Press, vol. 16(1), pages 119-24, June.
  15. Sofronis K. Clerides, 2004. "Price Discrimination with Differentiated Products: Definition and Identification," Economic Inquiry, Western Economic Association International, vol. 42(3), pages 402-412, July.
  16. Stole, Lars A., 2007. "Price Discrimination and Competition," Handbook of Industrial Organization, Elsevier.
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Cited by:
  1. Drayer, Joris & Rascher, Daniel A. & McEvoy, Chad D., 2012. "An examination of underlying consumer demand and sport pricing using secondary market data," Sport Management Review, Elsevier, vol. 15(4), pages 448-460.
  2. Siegert, Caspar & Ulbricht, Robert, 2014. "Dynamic Oligopoly Pricing: Evidence from the Airline Industry," TSE Working Papers 14-478, Toulouse School of Economics (TSE).

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