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Optimal ticket pricing for performance goods

Author

Listed:
  • Daniel R. Marburger

    (State University, AR, USA)

Abstract

When purchasing a ticket to a performance good, such as a movie or sporting event, the consumer does not actually buy the product, but simply access to viewing the product. Although the performance is the primary impetus for the ticket purchase, many performance goods offer complementary products such as concessions to their patrons. This paper suggests that when the price setter receives a share of revenues from concessions, overall profits will be maximized when tickets are priced in the inelastic section of demand. The model can be used to explain inelastic point estimates for ticket pricing found in other performance good studies. © 1997 John Wiley & Sons, Ltd.

Suggested Citation

  • Daniel R. Marburger, 1997. "Optimal ticket pricing for performance goods," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 18(5), pages 375-381.
  • Handle: RePEc:wly:mgtdec:v:18:y:1997:i:5:p:375-381
    DOI: 10.1002/(SICI)1099-1468(199708)18:5<375::AID-MDE833>3.0.CO;2-3
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    Citations

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    Cited by:

    1. 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.
    2. Juan Prieto-Rodríguez & Víctor Fernández-Blanco, 2006. "Optimal pricing and grant policies for museums," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 30(3), pages 169-181, December.
    3. Frey, Bruno S. & Meier, Stephan, 2006. "The Economics of Museums," Handbook of the Economics of Art and Culture, Elsevier.
    4. 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;The Industrial Organization Society, vol. 30(4), pages 325-347, June.
    5. Ira Horowitz, 2007. "If you play well they will come-and vice versa: bidirectional causality in major-league baseball," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 93-105.
    6. Chien-Ping Chen, 2009. "A Puzzle or a Choice: Uniform Pricing for Motion Pictures at the Box," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 37(1), pages 73-85, March.
    7. Budzinski, Oliver & Feddersen, Arne, 2015. "Grundlagen der Sportnachfrage: Theorie und Empirie der Einflussfaktoren auf die Zuschauernachfrage," Ilmenau Economics Discussion Papers 94, Ilmenau University of Technology, Institute of Economics.
    8. Rodríguez Guerrero, Plácido, 2012. "La economía del deporte/The Economics of Sport," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 30, pages 387-418, Agosto.
    9. 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.
    10. Mongeon, Kevin & Winfree, Jason, 2012. "Comparison of television and gate demand in the National Basketball Association," Sport Management Review, Elsevier, vol. 15(1), pages 72-79.
    11. Daniel, Rascher & Chad, McEvoy & Mark, Nagel & Matt, Brown, 2007. "Variable Ticket Pricing in Major League Baseball," MPRA Paper 25803, University Library of Munich, Germany.
    12. repec:bla:ecaffa:v:37:y:2017:i:2:p:271-278 is not listed on IDEAS
    13. Daniel, Rascher & Andrew, Schwarz, 2010. "Illustrations of Price Discrimination in Baseball," MPRA Paper 25807, University Library of Munich, Germany.

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