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The Welfare Effects of Ticket Resale

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  • Phillip Leslie
  • Alan Sorensen

Abstract

We develop an equilibrium model of ticket resale in which buyers' decisions in the primary market, including costly efforts to "arrive early" to buy underpriced tickets, are based on rational expectations of resale market outcomes. We estimate the parameters of the model using a novel dataset that combines transaction data from both the primary and secondary markets for a sample of major rock concerts. Our estimates indicate that while resale improves allocative efficiency, half of the welfare gain from reallocation is offset by increases in costly effort in the arrival game and transaction costs in the resale market.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15476.

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Date of creation: Nov 2009
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Handle: RePEc:nbr:nberwo:15476

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  1. Philip A. Haile, 2001. "Auctions with Resale Markets: An Application to U.S. Forest Service Timber Sales," American Economic Review, American Economic Association, vol. 91(3), pages 399-427, June.
  2. Marie Connolly & Alan Krueger, 2005. "Rockonomics: The Economics of Popular Music," Working Papers 878, Princeton University, Department of Economics, Industrial Relations Section..
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  5. Pascal Courty & Mario Pagliero, 2009. "Price Discrimination in the Concert Industry," Economics Working Papers ECO2009/05, European University Institute.
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  17. Judith Chevalier & Austan Goolsbee, 2005. "Are Durable Goods Consumers Forward Looking? Evidence from College Textbooks," NBER Working Papers 11421, National Bureau of Economic Research, Inc.
  18. Gautam Gowrisankaran & Marc Rysman, 2009. "Dynamics of Consumer Demand for New Durable Goods," NBER Working Papers 14737, National Bureau of Economic Research, Inc.
  19. Chenghuan Sean Chu & Phillip Leslie & Alan Sorensen, 2011. "Bundle-Size Pricing as an Approximation to Mixed Bundling," American Economic Review, American Economic Association, vol. 101(1), pages 263-303, February.
  20. Sherwin Rosen & Andy Rosenfield, 1995. "Ticket Pricing," University of Chicago - George G. Stigler Center for Study of Economy and State 120, Chicago - Center for Study of Economy and State.
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  23. Phillip Leslie, 2004. "Price Discrimination in Broadway Theater," RAND Journal of Economics, The RAND Corporation, vol. 35(3), pages 520-541, Autumn.
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Cited by:
  1. Courty, Pascal, 2011. "Unpriced quality," Economics Letters, Elsevier, vol. 111(1), pages 13-15, April.
  2. Eckard, E. Woodrow & Smith, Marlene A., 2013. "The impact of price discrimination on consumer surplus at popular music concerts," Economics Letters, Elsevier, vol. 118(1), pages 222-224.
  3. Courty, Pascal & Pagliero, Mario, 2009. "Price Discrimination in the Concert Industry," CEPR Discussion Papers 7143, C.E.P.R. Discussion Papers.
  4. 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.
  5. Chenghuan Sean Chu & Phillip Leslie & Alan Sorensen, 2011. "Bundle-Size Pricing as an Approximation to Mixed Bundling," American Economic Review, American Economic Association, vol. 101(1), pages 263-303, February.

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