Abstract
The ticketing industry exhibits a divergent pattern of return policy: some leading primary ticket
agents are having their own resale platforms, e.g., AXS Official Resale, Eventim fanSALE,
Ticketmaster Fan-to-Fan, etc.; while many other event organizers keep hands off the secondary
market, e.g., “Tickets sold are non-refundable or non-exchangable”. We propose a game-theoretic
framework and show the profitability of official resale is sensitive to: (1) consumer
search and matching pattern; and (2) how resellers and spot buyers agree on the resale price in
the secondary ticket market. Additionally, our findings explain why partial refund, a popular
pricing mechanism in hotel and airline industries, is rarely seen in ticketing.
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