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Ticket Underpricing And Public Support For Mega-Events

Author

Listed:
  • Christoph EICHHORN

    (Department of Economics, University of Munich)

  • Marco SAHM

    (Department of Business and Economics, TUM Munich)

Abstract

The organizer of a mega-event often owns a monopoly for several products like tickets and sponsorship contracts. While ticket prices below the maximum sellout price reduce gate revenues, they increase the degree to which the event is accepted by the population of the host region. Since public support usually serves as an important input factor for sponsors, it increases revenues in the market for sponsorship contracts. Hence, ticket underpricing may well maximize overall profits of the organizer. Moreover, if public support exerts some positive externality on the regional development, such underpricing may be beneficial for the host region, too.

Suggested Citation

  • Christoph EICHHORN & Marco SAHM, 2010. "Ticket Underpricing And Public Support For Mega-Events," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 31, pages 37-46.
    • Handle: RePEc:tou:journl:v:31:y:2010:p:37-46
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    File URL: https://regionetdeveloppement.univ-tln.fr/wp-content/uploads/6-Eichhorn_Sahm.pdf
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    More about this item

    Keywords

    MULTI-PRODUCT MONOPOLY; TWO-SIDED MARKETS; DEMAND RATIONING;
    All these keywords.

    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing

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