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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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    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. 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.
    4. Ricard Gil & Evsen Korkmaz & Ozge Sahin, 2014. "Optimal Pricing of Access and Secondary Goods with Repeat Purchases: Evidence from Online Grocery Shopping and Delivery Fees," Working Papers 14-10, NET Institute.
    5. 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.
    6. 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.
    7. David Forrest & Robert Simmons & Patrick Feehan, 2002. "A Spatial Cross–Sectional Analysis of Elasticity of Demand for Soccer," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(3), pages 336-356, August.
    8. Mark A. Diehl & Joel G. Maxcy & Joris Drayer, 2015. "Price Elasticity of Demand in the Secondary Market," Journal of Sports Economics, , vol. 16(6), pages 557-575, August.
    9. Mehmet Şahin, 2019. "Optimization of dynamic ticket pricing parameters," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 18(4), pages 306-316, August.
    10. Daniel, Rascher & Chad, McEvoy & Mark, Nagel & Matt, Brown, 2007. "Variable Ticket Pricing in Major League Baseball," MPRA Paper 25803, University Library of Munich, Germany.
    11. Caleb S. Fuller & David S. Lucas, 2017. "Pricing Political Rallies," Economic Affairs, Wiley Blackwell, vol. 37(2), pages 271-278, June.
    12. Frey, Bruno S. & Meier, Stephan, 2006. "The Economics of Museums," 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 29, pages 1017-1047, Elsevier.
    13. Ricard Gil & Wesley R. Hartmann, 2009. "Empirical Analysis of Metering Price Discrimination: Evidence from Concession Sales at Movie Theaters," Marketing Science, INFORMS, vol. 28(6), pages 1046-1062, 11-12.
    14. Knut Løyland & Vidar Ringstad, 2009. "On the Price and Income Sensitivity of the Demand for Sports: Has Linder’s Disease Become More Serious?," Journal of Sports Economics, , vol. 10(6), pages 601-618, December.
    15. 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.
    16. Stefan Szymanski, 2021. "On the Incidence of an Ad Valorem Tax: The Adoption of VAT in the UK and Cost Pass Through by English Football Clubs," De Economist, Springer, vol. 169(1), pages 37-61, February.
    17. Jaume García & Plácido Rodríguez, 2002. "The Determinants of Football Match Attendance Revisited," Journal of Sports Economics, , vol. 3(1), pages 18-38, February.
    18. 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.
    19. 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.
    20. Ricard Gil & Evsen Korkmaz & Ozge Sahin, 2020. "Can free-shipping hurt online retailers?," Quantitative Marketing and Economics (QME), Springer, vol. 18(3), pages 305-342, September.
    21. Rodríguez Guerrero, Plácido, 2012. "La economía del deporte/The Economics of Sport," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 30, pages 387-418, Agosto.
    22. Timothy E. Zimmer & Allison Snyder & Lawrence Bukenya, 2021. "American Baseball Fans Do Not Influence Game Outcomes," Economics Bulletin, AccessEcon, vol. 41(2), pages 741-750.
    23. Ricard Gil & Evsen Korkmaz & Ozge Sahin, 0. "Can free-shipping hurt online retailers?," Quantitative Marketing and Economics (QME), Springer, vol. 0, pages 1-38.
    24. Daniel, Rascher & Andrew, Schwarz, 2010. "Illustrations of Price Discrimination in Baseball," MPRA Paper 25807, University Library of Munich, Germany.

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