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The Welfare Effects of Ticket Resale

  • Phillip Leslie
  • Alan Sorensen

We develop an equilibrium model of ticket resale in which buyers' decisions in the primary market, including costly efforts to "arrive early" to buy underpriced tickets, are based on rational expectations of resale market outcomes. We estimate the parameters of the model using a novel dataset that combines transaction data from both the primary and secondary markets for a sample of major rock concerts. Our estimates indicate that while resale improves allocative efficiency, half of the welfare gain from reallocation is offset by increases in costly effort in the arrival game and transaction costs in the resale market.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15476.

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Date of creation: Nov 2009
Date of revision:
Handle: RePEc:nbr:nberwo:15476
Note: IO
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  18. Phillip Leslie, 2004. "Price Discrimination in Broadway Theater," RAND Journal of Economics, The RAND Corporation, vol. 35(3), pages 520-541, Autumn.
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