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When Promoters Like Scalpers
Author(s) -
Karp Larry,
Perloff Jeffrey M.
Publication year - 2005
Publication title -
journal of economics and management strategy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.672
H-Index - 68
eISSN - 1530-9134
pISSN - 1058-6407
DOI - 10.1111/j.1530-9134.2005.00049.x
Subject(s) - monopoly , microeconomics , economics , business , industrial organization
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.The moment a performance begins, that seat is dead … . It's like fruit. It's perishable. — Jeffrey Seller, producer of Rent .
New York Times , July 20, 2003.