Why Promoters Like Scalpers
Larry S. Karp
University of California, Berkeley
Jeffrey M. Perloff
University of California, Berkeley - Department of Agricultural & Resource Economics
October 25, 2000
If a monopoly supplies a perishable good, such as tickets to a performance, and is unable to price discriminate within a period, the monopoly may benefit from the potential entry of resellers. If the monopoly attempts to intertemporally price discriminate, the equilibrium in the game among buyers is indeterminate when the resellers are not allowed to enter, and the monopoly?s problem is not well defined. An arbitrarily small amount of heterogeneity of information among the buyers leads to a unique equilibrium. We show how the potential entry of resellers alters this equilibrium.
Number of Pages in PDF File: 33
Keywords: price discrimination, scalpers, coordination game, common knowledge
JEL Classification: L12, D42, D45, D82working papers series
Date posted: February 6, 2001
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo3 in 0.359 seconds