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An economic guide to ticket pricing in the entertainment industry

Author

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  • Pascal COURTY

    (London Business School, Department of Economics)

Abstract

This paper reviews the literature on ticket pricing in the entertaniment industry. All along, I try to evaluate whether ticket markets outeomes are consistent with theoretical predictions. Overall, the literature provides a good understanding for observed variations in ticket prices. The literature, however, fails to explain situations where prices do not vary. We have but a poor understanding for why prices often do not vary over the run of a show, why more popular shows do not charge more and why most venues are scaled in just a few sections. I also review the empirical literature of price discrimination in ticket, markets. By contrasting the theoretical and the enipirical literatures, the paper identifies a set of promising directions for future research.

Suggested Citation

  • 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).
    • Handle: RePEc:ctl:louvre:2000024
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    File URL: http://sites.uclouvain.be/econ/DP/REL/2000024.pdf
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    References listed on IDEAS

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    1. Rosen, Sherwin & Rosenfield, Andrew M, 1997. "Ticket Pricing," Journal of Law and Economics, University of Chicago Press, vol. 40(2), pages 351-376, October.
      • Rosen, Sherwin & Rosenfield, Andy, 1995. "Ticket Pricing," Working Papers 120, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    2. Walras, L. & Holmes, P., 1980. "The state and the railways," Journal of Public Economics, Elsevier, vol. 13(1), pages 81-100, February.
    3. Coase, Ronald H, 1972. "Durability and Monopoly," Journal of Law and Economics, University of Chicago Press, vol. 15(1), pages 143-149, April.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Conze, Maximilian & Kramm, Michael, 2013. "The Recommendation Effect in the Hotelling Game - A New Result for an Old Model," Bonn Econ Discussion Papers 14/2013, University of Bonn, Bonn Graduate School of Economics (BGSE).
    2. Jong-Hee Hahn & Jinwoo Kim & Sang-Hyun Kim & Jihong Lee, 2018. "Price discrimination with loss averse consumers," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(3), pages 681-728, May.
    3. 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.
    4. Maximilian Conze & Michael Kramm, 2013. "The Recommendation Effect in the Hotelling Game - A New Result for an Old Model," Ruhr Economic Papers 0460, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    5. Baldin, Andrea, 2017. "A DEA approach for selecting a bundle of tickets for performing arts events," Journal of Retailing and Consumer Services, Elsevier, vol. 39(C), pages 190-200.
    6. Connolly, Marie & Krueger, Alan B., 2006. "Rockonomics: The Economics of Popular Music," Handbook of the Economics of Art and Culture, in: V.A. Ginsburgh & D. Throsby (ed.), Handbook of the Economics of Art and Culture, edition 1, volume 1, chapter 20, pages 667-719, Elsevier.
    7. Courty, Pascal & Pagliero, Mario, 2012. "The Pricing of Art and the Art of Pricing: Pricing Styles in the Concert Industry," CEPR Discussion Papers 8967, C.E.P.R. Discussion Papers.
    8. Maclean, K.D.S. & Ødegaard, F., 2020. "Dynamic capacity allocation for group bookings in live entertainment," European Journal of Operational Research, Elsevier, vol. 287(3), pages 975-988.
    9. Marie Connolly & Alan Krueger, 2005. "Rockonomics: The Economics of Popular Music," Working Papers 878, Princeton University, Department of Economics, Industrial Relations Section..
    10. 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.
    11. Ken Sanford & Frank Scott, 2014. "What Are SEC Football Tickets Worth? Evidence from Secondary Market Transactions," Southern Economic Journal, John Wiley & Sons, vol. 81(1), pages 23-55, July.
    12. Pascal Courty, 2003. "Some Economics of Ticket Resale," Journal of Economic Perspectives, American Economic Association, vol. 17(2), pages 85-97, Spring.
    13. Jones, Steven L. & Yeoman, John C., 2009. "The promoter's role in ticket pricing: Implications of real options for optimal posted prices and rationing," Journal of Business Research, Elsevier, vol. 62(11), pages 1187-1192, November.
    14. Vlad Radoias, 2017. "When Price Discrimination Fails – A Principal Agent Problem with Social Influence," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 38(2), pages 212-221, March.
    15. Alexei Alexandrov & Martin A. Lariviere, 2012. "Are Reservations Recommended?," Manufacturing & Service Operations Management, INFORMS, vol. 14(2), pages 218-230, April.
    16. Michael Rushton, 2011. "Pricing the Arts," Chapters, in: Ruth Towse (ed.), A Handbook of Cultural Economics, Second Edition, chapter 49, Edward Elgar Publishing.
    17. Sá Nelson & Turkay Evsen, 2013. "Ticket Pricing and Scalping: A Game Theoretical Approach," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 13(2), pages 627-653, September.
    18. Jørgensen, Steffen & Zaccour, Georges, 2019. "Optimal pricing and advertising policies for a one-time entertainment event," Journal of Economic Dynamics and Control, Elsevier, vol. 100(C), pages 395-416.
    19. repec:zbw:rwirep:0460 is not listed on IDEAS
    20. Andrew Sweeting, 2012. "Dynamic Pricing Behavior in Perishable Goods Markets: Evidence from Secondary Markets for Major League Baseball Tickets," Journal of Political Economy, University of Chicago Press, vol. 120(6), pages 1133-1172.
    21. Bakker, Gerben, 2012. "Sunk costs and the dynamics of creative industries," Economic History Working Papers 49081, London School of Economics and Political Science, Department of Economic History.
    22. Leung Tin Cheuk & Tsang Kwok Ping & Tsui Kevin K., 2020. "Why Are Inferior Seats “Underpriced”? Evidence from the English Premier League," Man and the Economy, De Gruyter, vol. 7(1), pages 1-26, June.

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    More about this item

    Keywords

    Ticket Markets; Price Discrimination; Price Compression;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • Z1 - Other Special Topics - - Cultural Economics

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