American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Primary-Market Auctions for Event Tickets: Eliminating the Rents of "Bob the Broker"?
American Economic Journal: Microeconomics
vol. 15,
no. 1, February 2023
(pp. 142–70)
(Complimentary)
Abstract
Economists have long been puzzled by event-ticket underpricing: underpricing reduces revenue for the performer and encourages socially wasteful rent-seeking by ticket brokers. What about using an auction? This paper studies the introduction of auctions into this market by Ticketmaster in the mid-2000s. By combining primary-market auction data from Ticketmaster with secondary-market resale value data from eBay, we show that Ticketmaster's auctions 'worked': they substantially improved price discovery, roughly doubled performer revenues, and, on average, nearly eliminated the potential arbitrage profits associated with underpriced tickets. We conclude by discussing why, nevertheless, the auctions failed to take off.Citation
Budish, Eric, and Aditya Bhave. 2023. "Primary-Market Auctions for Event Tickets: Eliminating the Rents of "Bob the Broker"?" American Economic Journal: Microeconomics 15 (1): 142–70. DOI: 10.1257/mic.20180230Additional Materials
JEL Classification
- D44 Auctions
- D47 Market Design
- L82 Entertainment; Media