Why Promoters Like Scalpers

33 Pages Posted: 6 Feb 2001

See all articles by Larry S. Karp

Larry S. Karp

University of California, Berkeley

Jeffrey M. Perloff

University of California, Berkeley - Department of Agricultural & Resource Economics

Date Written: October 25, 2000

Abstract

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.

Keywords: price discrimination, scalpers, coordination game, common knowledge

JEL Classification: L12, D42, D45, D82

Suggested Citation

Karp, Larry S. and Perloff, Jeffrey M., Why Promoters Like Scalpers (October 25, 2000). Available at SSRN: https://ssrn.com/abstract=258854 or http://dx.doi.org/10.2139/ssrn.258854

Larry S. Karp (Contact Author)

University of California, Berkeley ( email )

Dept. of Agriculture & Resource Economics
313 Giannini Hall
Berkeley, CA 94720
United States
510-643-8911 (Fax)

Jeffrey M. Perloff

University of California, Berkeley - Department of Agricultural & Resource Economics ( email )

207 Giannini Hall
Berkeley, CA 94720
United States
510-642-9574 (Phone)
510-643-8911 (Fax)

HOME PAGE: http://are.berkeley.edu/~perloff

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