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Journal of Economics Perspective

By Pascal Courty


Abstract: A large number of brokers and scalpers resell a significant fraction of event tickets at substantial markups and they manage to do so despite the fact that promoters and ticketing agencies do not support resell for profits and often attempt to block secondary market. Why can’t promoters capture the profits from secondary markets or at least deter brokers from doing so? I present a simple explanation that borrows from the literature on airline ticket pricing and draw parallels with that literature. I review some evidence consistent with this explanation. 1 More than a thousand ticket brokers in the United States offer, at substantial markups, a wide selection of tickets for the theatre, concerts, sporting events, and special events. According to some estimates, brokers resell 10 percent of primary tickets and this figure goes up to 20-30 percent for top-tier seats (Happel and Jennings, 2002). In addition to brokers, who are licensed businesses, many scalpers resell tickets on the street. Event promoters typically try to discourage or prevent resale for profit. Most promoters limit block purchases and support other measures that restrict brokers ’ access to tickets. Some promoters also actively support laws that regulate resale and restrict resale mark-ups. In contrast, economist

Year: 2011
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