Working Paper: NBER ID: w15476
Authors: Phillip Leslie; Alan Sorensen
Abstract: We develop an equilibrium model of ticket resale in which buyers' decisions in the primary market, including costly efforts to "arrive early" to buy underpriced tickets, are based on rational expectations of resale market outcomes. We estimate the parameters of the model using a novel dataset that combines transaction data from both the primary and secondary markets for a sample of major rock concerts. Our estimates indicate that while resale improves allocative efficiency, half of the welfare gain from reallocation is offset by increases in costly effort in the arrival game and transaction costs in the resale market.
Keywords: ticket resale; welfare effects; allocative efficiency; transaction costs
JEL Codes: D4; L0
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| ticket resale (D44) | allocative efficiency (D61) |
| increased transaction costs (D23) | allocative efficiency (D61) |
| costs of effort (J30) | allocative efficiency (D61) |
| ticket resale (D44) | transaction costs (D23) |
| ticket resale (D44) | primary market sales (G10) |
| resale alters consumers' willingness to pay (D16) | primary market sales (G10) |
| gross surplus from resale (D46) | concertgoers' welfare (I39) |