Rock Concert Pricing and Anti-Scalping Laws: Selling to an Input

13 Pages Posted: 28 Sep 2005

See all articles by Philip A. Curry

Philip A. Curry

University of Waterloo

Lutz-Alexander Busch

University of Waterloo - Department of Economics; University of Western Ontario - Department of Economics

Date Written: September 2005

Abstract

This paper develops a model that jointly explains excess demand for performance events and the presence of anti-scalping laws. The explanation is based on the fact that the buyers of tickets are also an important input into the performance experience. The use of line-ups as a screening mechanism (leading to apparent under-pricing of tickets) can be profit maximizing if the input quality of a given buyer and her willingness to pay for tickets are not sufficiently positively correlated. Such a mechanism is not possible, however, if the resale of tickets above the posted price is permitted. Since resale amounts to input substitution, banning such resale is therefore efficiency enhancing.

Keywords: equilibrium excess demand, pricing

JEL Classification: D45, K20

Suggested Citation

Curry, Philip A. and Busch, Lutz-Alexander, Rock Concert Pricing and Anti-Scalping Laws: Selling to an Input (September 2005). Available at SSRN: https://ssrn.com/abstract=805328 or http://dx.doi.org/10.2139/ssrn.805328

Philip A. Curry (Contact Author)

University of Waterloo ( email )

Waterloo, Ontario N2L 3G1
Canada

Lutz-Alexander Busch

University of Waterloo - Department of Economics ( email )

Waterloo, Ontario N2L 3G1
Canada
519-888-4567 ext. 5229 (Phone)
519-725-0530 (Fax)

University of Western Ontario - Department of Economics ( email )

London, Ontario N6A 5B8
Canada
519-679-2111x(5323) (Phone)

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