The Impact of Pricing on Ticket Sales in the Theater Industry
Date Issued
2015
Date
2015
Author(s)
Hsieh, Chia-Yin
Abstract
In the entertainment industry, firms deliver experiences to their customers by selling tickets. Theatrical plays is an example in common. Typically, the marginal cost for selling one more ticket is significantly lower than the sunk investment. Therefore, leaving a seat empty in a performance may be considered as a loss on sale. What a firm is how to make the pricing and related decisions under limited sources (i.e., time, limited seats, etc.) in order to maximize the expected profit. The solution lies in the field of revenue management. Obviously, there are seats with different quality levels in a performance space. Moreover, from the past experience, implementing price discrimination on those seats can generate more profit. However, most of the decisions are still only based on experts'' experiences and intuitions, and these decisions may be improved by implementing data analysis methods. It is quite important for them to adopt scientific methods to better price tickets and manage the revenue. In this thesis, an empirical study is conducted for investigating the impact of prices and other factors on sales quantity in the theater industry. We obtain the sales data from a leading theater company in Taiwan. We separate the demands into three price levels to study the different patterns on ticket prices between each other. With several regression models and statistical techniques, analysis results and suggestions for the pricing and scheduling decisions are provided.
Subjects
ticket pricing
price discrimination
regression analysis
revenue management
Type
thesis
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