Wednesday, April 8, 2009
Posted by D. Daniel Sokol
Pascal Courty (Economics, European University Institute) and Mario Pagliero (Economics and Finance, University of Turin, and Collegio Carlo Alberto) provide evidence of The Impact of Price Discrimination on Revenue: Evidence from the Concert Industry.
ABSTRACT: Concert tickets can either be sold at a single price or at multiple prices corresponding to different seating categories. We study the relationship between price discrimination and revenue by examining variations in the number of seating categories across concert, tour, artist, location, and time. Offering multiple seating categories leads to revenues that are approximately 5 percent higher than with single price ticketing. The return to price discrimination is higher in markets with more heterogeneous demand, in smaller venues and in more competitive markets. The return of increasing from three to four categories of seating is about half that of increasing from one to two.