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Ticket Pricing


  • Sherwin Rosen
  • Andy Rosenfield


Price discrimination among ticket service classes is analyzed when aggregate demand is known and individual preferences are private information. Serving customers in cheap second-class seats limits the seller's ability to extract surplus from expensive first-class seats because some switch to the lower class. Discrimination is greatest in the class with the largest variance in demand prices. The seller's incentives to limit substitution by altering the between-class quality spread and the pricing of complementary (concession) goods are also analyzed. These issues depend on comparing "marginal" with "average" customers parallel to the provision of public goods. Finally, when capacity limitations require sequential servicing of buyers in "batches" (for example, theatrical productions), intertemporal price discrimination requires prices to decline over time, so customers with the greatest demand prices buy higher-priced tickets to earlier performances rather than wait for later performances. The rational policy can generate queues for early performances. Copyright 1997 by the University of Chicago.
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Suggested Citation

  • 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.
  • Handle: RePEc:fth:chices:120

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    References listed on IDEAS

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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. 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.
    3. Alan Krueger, 2004. "The Economics of Real Superstars: The Market for Rock Concerts in the Material World," Working Papers 863, Princeton University, Department of Economics, Industrial Relations Section..
    4. 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.
    5. 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.
    6. Volker Nocke & Martin Peitz, 2003. "Monopoly Pricing under Demand Uncertainty: Final Sales versus Introductory ffers," PIER Working Paper Archive 03-002, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    7. 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.
    8. Connolly, Marie & Krueger, Alan B., 2006. "Rockonomics: The Economics of Popular Music," Handbook of the Economics of Art and Culture, Elsevier.
    9. Darren Grant, 2010. "Dead On Arrival: Zero Tolerance Laws Don'T Work," Economic Inquiry, Western Economic Association International, vol. 48(3), pages 756-770, July.
    10. Miller, Nolan & Piankov, Nikita & Zeckhauser, Richard, 2001. "When to Haggle," Working Paper Series rwp01-025, Harvard University, John F. Kennedy School of Government.
    11. Phillip Leslie & Alan Sorensen, 2009. "The Welfare Effects of Ticket Resale," NBER Working Papers 15476, National Bureau of Economic Research, Inc.
    12. Alan B. Krueger, 2005. "The Economics of Real Superstars: The Market for Rock Concerts in the Material World," Journal of Labor Economics, University of Chicago Press, vol. 23(1), pages 1-30, January.
    13. W. Walls, 2010. "Superstars and heavy tails in recorded entertainment: empirical analysis of the market for DVDs," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 34(4), pages 261-279, November.
    14. Gil, Ricard & Hartmann, Wesley R., 2008. "Why Does Popcorn Cost So Much at the Movies? An Empirical Analysis of Metering Price Discrimination," Research Papers 1983, Stanford University, Graduate School of Business.
    15. Marie Connolly & Alan Krueger, 2005. "Rockonomics: The Economics of Popular Music," Working Papers 878, Princeton University, Department of Economics, Industrial Relations Section..
    16. Pascal Courty & Mario Pagliero, 2009. "Price Discrimination in the Concert Industry," Economics Working Papers ECO2009/05, European University Institute.
    17. 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.
    18. Kendall, Todd D., 2008. "Durable good celebrities," Journal of Economic Behavior & Organization, Elsevier, vol. 66(2), pages 312-321, May.
    19. Ricard Gil, 2006. "Demand Shifts and Changes in Competition: Evidence from the Movie Theatre Industry," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 13(3), pages 407-428.
    20. 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).
    21. 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.
    22. Wen-jhan Jane & Wei-peng Chen & Yuan-lin Hsu, 2015. "The impact of deregulation on the movie box office after Taiwan’s entry into the WTO: the difference-in-differences estimation," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 5(2), pages 289-308, December.
    23. Michael Rushton, 2011. "Pricing the Arts," Chapters,in: A Handbook of Cultural Economics, Second Edition, chapter 49 Edward Elgar Publishing.
    24. Pedersen, Pål Andreas, 2003. "On the optimal fare policies in urban transportation," Transportation Research Part B: Methodological, Elsevier, vol. 37(5), pages 423-435, June.
    25. 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.

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