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Why were FIFA World Cup tickets so cheap? Monopoly pricing, demand quality and two-sided markets

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  • Eichhorn, Christoph
  • Sahm, Marco

Abstract

We examine the pricing decision of a multi-product monopolist in a two-sided market with capacity constraints where the type structure of buyers on one side is an important determinant of profit on the other side. Prices below the maximum sellout price and rationing demand in the first market might be optimal to reach a demand quality, i.e. a type distribution more favorable for sales in the second market. The model explains frequently observed underpricing and resale deterrence, e.g. in the (sports) entertainment industry, where the spectators' extraversion is negatively related to their income and serves as an input factor for sponsors.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:joepsy:v:31:y:2010:i:2:p:212-217
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    References listed on IDEAS

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    Cited by:

    1. Hendrik Sonnabend, 2016. "Fairness constraints on profit-seeking: evidence from the German club concert industry," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 40(4), pages 529-545, November.
    2. Greiner, Tanja & Sahm, Marco, 2018. "How effective are advertising bans? On the demand for quality in two-sided media markets," Information Economics and Policy, Elsevier, vol. 43(C), pages 48-60.

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