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Optimal ticket pricing for performance goods
Author(s) -
Marburger Daniel R.
Publication year - 1997
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/(sici)1099-1468(199708)18:5<375::aid-mde833>3.0.co;2-3
Subject(s) - ticket , product (mathematics) , purchasing , revenue , point (geometry) , business , microeconomics , advertising , setter , economics , commerce , marketing , computer science , finance , computer security , history , geometry , mathematics , archaeology
When purchasing a ticket to a performance good, such as a movie or sporting event, the consumer does not actually buy the product, but simply access to viewing the product. Although the performance is the primary impetus for the ticket purchase, many performance goods offer complementary products such as concessions to their patrons. This paper suggests that when the price setter receives a share of revenues from concessions, overall profits will be maximized when tickets are priced in the inelastic section of demand. The model can be used to explain inelastic point estimates for ticket pricing found in other performance good studies. © 1997 John Wiley & Sons, Ltd.