DP7120 The Impact of Price Discrimination on Revenue: Evidence from the Concert Industry

Author(s): Pascal Courty, Mario Pagliero
Publication Date: January 2009
Keyword(s): Price discrimination, return to price discrimination, second degree price discrimination
JEL(s): D42, L82, Z11
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=7120

Concert tickets can either be sold at a single price or at multiple prices corresponding to different seating categories. We study the relationship between price discrimination and revenue by examining variations in the number of seating categories across concert, tour, artist, location, and time. Offering multiple seating categories leads to revenues that are approximately 5 percent higher than with single price ticketing. The return to price discrimination is higher in markets with more heterogeneous demand, in smaller venues and in more competitive markets. The return of increasing from three to four categories of seating is about half that of increasing from one to two.