Ticket Pricing Under Demand Uncertainty

Abstract

This Paper studies a monopolist selling tickets to consumers who learn new information about their demands over time. The monopolist can sell early to uninformed consumers and/or close to the event date to informed ones, it can ration tickets and allow ticket holders to resell. I show that rationing and intertemporal sales are never optimal. More surprisingly, the monopolist cannot do strictly better by allowing resale despite the fact that consumers are willing to pay more when they can resell tickets. I discuss the implications of the model for the pricing practices observed in ticket markets.

Keywords: Ticket pricing, resale, price discrimination

JEL Classification: D42, L82