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Some Economics of Ticket Resale

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  • Pascal Courty

Abstract

A large number of brokers and scalpers resell a significant fraction of event tickets at substantial markups and they manage to do so despite the fact that promoters and ticketing agencies do not support resell for profits and often attempt to block secondary market. Why can't promoters capture the profits from secondary markets or at least deter brokers from doing so? I present a simple explanation that borrows from the literature on airline ticket pricing and draw parallels with that literature. I review some evidence consistent with this explanation.

Suggested Citation

  • Pascal Courty, 2003. "Some Economics of Ticket Resale," Journal of Economic Perspectives, American Economic Association, vol. 17(2), pages 85-97, Spring.
  • Handle: RePEc:aea:jecper:v:17:y:2003:i:2:p:85-97
    Note: DOI: 10.1257/089533003765888449
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/089533003765888449
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    References listed on IDEAS

    as
    1. James L. Swofford, 1999. "Arbitrage, Speculation, and Public Policy Toward Ticket Scalping," Public Finance Review, , vol. 27(5), pages 531-540, September.
    2. Courty, Pascal, 2003. "Ticket Pricing under Demand Uncertainty," Journal of Law and Economics, University of Chicago Press, vol. 46(2), pages 627-652, October.
    3. Gale, Ian L & Holmes, Thomas J, 1993. "Advance-Purchase Discounts and Monopoly Allocation of Capacity," American Economic Review, American Economic Association, vol. 83(1), pages 135-146, March.
    4. Becker, Gary S, 1991. "A Note on Restaurant Pricing and Other Examples of Social Influences on Price," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 1109-1116, October.
    5. Daniel Kahneman & Jack L. Knetsch & Richard H. Thaler, 1991. "Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 193-206, Winter.
    6. 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).
    7. Patrick DeGraba, 1995. "Buying Frenzies and Seller-Induced Excess Demand," RAND Journal of Economics, The RAND Corporation, vol. 26(2), pages 331-342, Summer.
    8. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-741, September.
    9. James D. Dana Jr., 1999. "Equilibrium Price Dispersion Under Demand Uncertainty: The Roles of Costly Capacity and Market Structure," RAND Journal of Economics, The RAND Corporation, vol. 30(4), pages 632-660, Winter.
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    Citations

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    Cited by:

    1. Javad Nasiry & Ioana Popescu, 2012. "Advance Selling When Consumers Regret," Management Science, INFORMS, vol. 58(6), pages 1160-1177, June.
    2. Pascal Courty, 2005. "Buying Frenzies," Economics Working Papers ECO2005/27, European University Institute.
    3. repec:ebl:ecbull:eb-14-00812 is not listed on IDEAS
    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. Pascal Courty & Mario Pagliero, 2012. "The Impact of Price Discrimination on Revenue: Evidence from the Concert Industry," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 359-369, February.
    6. Matthias Peiss & Roland Kirstein, 2014. "Optimal ticket pricing in professional sports: a social identity approach," Economics Bulletin, AccessEcon, vol. 34(4), pages 2138-2150.
    7. Aditya Bhave & Eric Budish, 2017. "Primary-Market Auctions for Event Tickets: Eliminating the Rents of 'Bob the Broker'?," NBER Working Papers 23770, National Bureau of Economic Research, Inc.
    8. Melissa Boyle & Lesley Chiou, 2009. "Broadway productions and the value of a Tony Award," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 33(1), pages 49-68, February.
    9. Sergey MALAKHOV, 2016. "Law of One Price and Optimal Consumption-Leisure Choice Under Price Dispersion," Expert Journal of Economics, Sprint Investify, vol. 4(1), pages 1-8.
    10. Eichhorn, Christoph & Sahm, Marco, 2010. "Why were FIFA World Cup tickets so cheap? Monopoly pricing, demand quality and two-sided markets," Journal of Economic Psychology, Elsevier, vol. 31(2), pages 212-217, April.
    11. Liu, Ting & Schiraldi, Pasquale, 2014. "Buying frenzies in durable-goods markets," European Economic Review, Elsevier, vol. 70(C), pages 1-16.
    12. Connolly, Marie & Krueger, Alan B., 2006. "Rockonomics: The Economics of Popular Music," Handbook of the Economics of Art and Culture, Elsevier.
    13. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899, March.
    14. Marie Connolly & Alan Krueger, 2005. "Rockonomics: The Economics of Popular Music," Working Papers 878, Princeton University, Department of Economics, Industrial Relations Section..
    15. Victor M. Bennett & Robert Seamans & Feng Zhu, 2015. "Cannibalization and option value effects of secondary markets: Evidence from the US concert industry," Strategic Management Journal, Wiley Blackwell, vol. 36(11), pages 1599-1614, November.
    16. Andrew Sweeting, 2008. "Equilibrium Price Dynamics in Perishable Goods Markets: The Case of Secondary Markets for Major League Baseball Tickets," NBER Working Papers 14505, National Bureau of Economic Research, Inc.
    17. Humphreys, Brad R. & Soebbing, Brian P., 2012. "A test of monopoly price dispersion under demand uncertainty," Economics Letters, Elsevier, vol. 114(3), pages 304-307.
    18. Tim Dittmer & Bob Carbaugh, 2014. "Major League Baseball: Dynamic Ticket Pricing and Measurement Costs," Journal for Economic Educators, Middle Tennessee State University, Business and Economic Research Center, vol. 14(1), pages 44-57, Fall.
    19. Dennis Halcoussis & Timothy Mathews, 2007. "eBay auctions for Third Eye Blind concert tickets," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 31(1), pages 65-78, March.
    20. repec:ebl:ecbull:eb-14-00811 is not listed on IDEAS
    21. Holger Herbst, 2014. "Pricing Heterogeneous Goods under Ex Post Private Information," Bonn Econ Discussion Papers bgse01_2015, University of Bonn, Germany.
    22. repec:ebl:ecbull:eb-14-00787 is not listed on IDEAS
    23. Julia Hiscock & David E. Hojman, 2004. "Where Have All the Flowers Gone? Coase Theorem Failures in English Summer Cultural Events: The Case of Sidmouth International Festival," Research Papers 200406, University of Liverpool Management School.
    24. Liang, Xiaoying & Xie, Lei & Yan, Houmin, 2012. "Bertrand competition with intermediation," Economics Letters, Elsevier, vol. 116(1), pages 112-114.

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