The Revenue Gains from Multi-Tier Ticket Pricing: Evidence from Pop Music Concerts

Authors


University of Colorado Denver, Denver, CO 80202, USA. E-mail: woody.eckard@ucdenver.edu

Abstract

We provide empirical estimates of the revenue benefits of multi-tier pricing at a major US pop music venue. Our unique sample includes data on the number of tickets sold at every price. Mean revenue gain from multi-tier pricing is estimated to be about $20,000 per show, a 4.2% increase over uniform pricing, although the gains were as high as 21.2% for one performer. We also provide evidence that customer segmentation by income is a likely motive of multi-tier pricing and, for the first time, that the standard assumption of zero marginal cost of additional venue attendees is valid. Copyright © 2012 John Wiley & Sons, Ltd.

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