Affiliation:
1. University of Chicago Booth School of Business (email: )
2. Bank of America Merrill Lynch (email: )
Abstract
Economists have long been puzzled by event-ticket underpricing: underpricing reduces revenue for the performer and encourages socially wasteful rent-seeking by ticket brokers. What about using an auction? This paper studies the introduction of auctions into this market by Ticketmaster in the mid-2000s. By combining primary-market auction data from Ticketmaster with secondary-market resale value data from eBay, we show that Ticketmaster’s auctions “worked”: they substantially improved price discovery, roughly doubled performer revenues, and, on average, nearly eliminated the potential arbitrage profits associated with underpriced tickets. We conclude by discussing why, nevertheless, the auctions failed to take off. (JEL D44, D47, L82)
Publisher
American Economic Association
Subject
General Economics, Econometrics and Finance
Reference75 articles.
1. Associated Press. 2007. "Ticketmaster Signs Resale Deal with N.F.L." New York Times, December 19. http://www.nytimes.com/2007/12/19/business/19ticket.html.
2. The Winner's Curse, Reserve Prices, and Endogenous Entry: Empirical Insights from eBay Auctions
3. Economic Insights from Internet Auctions
4. Baliga, Sandeep. 2011. "How to Increase Revenue at Next Restaurant." http://cheaptalk.org/2011/04/11/ how-to-increase-revenue-at-next-restaurant/ (accessed July 17, 2018).
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1 articles.
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