An Empirical Study of Ticket Pricing at Live Concerts
Date Issued
2012
Date
2012
Author(s)
C.Su, Eric
Abstract
Traditionally, concert ticket sales and merchandise sales which are complementary to one other have been examined separately. The following paper conducts an empirical study to develop a model that links the relationship between a consumer’s merchandise preferences and its influence on the individual’s ticket reservation price. Two of the most prevalent concert merchandise items, the Glowstick and the T-Shirt, are selected to represent this category. The merchandise variables investigated include the consumer’s personal interest in the merchandise item, the difference in the reservation price for a merchandise item due to celebrity stardom, and the individual’s perception of the merchandise spending of an average concert attendee. Regression is used to explain the link between ticket reservation price model and these merchandise variables. It is discovered that there is a stronger brand influence to Celebrity T-Shirts when compared to Celebrity Glowsticks on Ticket Reservation Prices. Using the model to forecast a larger population demand through ticket reservation prices, revenue management is applied to a live ticket concert scenario to determine the optimal ticket prices. Compared to the traditional scenario of ticket pricing, the revenue management scheme incorporating the merchandise regression model shows a 51.19% improvement in revenue.
Subjects
Reservation Price (Willingness-to-Pay)
Concert Ticket Pricing
Merchandising
Celebrity Branding
Multiple Regression
Revenue Management
Type
thesis
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