The Revenue Gains from Multi-Tier Ticket Pricing: Evidence from Pop Music Concerts
Article first published online: 1 JUN 2012
Copyright © 2012 John Wiley & Sons, Ltd.
Managerial and Decision Economics
Volume 33, Issue 7-8, pages 463–473, October-December 2012
How to Cite
Eckard, E. W. and Smith, M. A. (2012), The Revenue Gains from Multi-Tier Ticket Pricing: Evidence from Pop Music Concerts. Manage. Decis. Econ., 33: 463–473. doi: 10.1002/mde.2549
- Issue published online: 18 SEP 2012
- Article first published online: 1 JUN 2012
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.