= = Working Paper = = Should Event Organizers Prevent Resale of Tickets? Yao Cui Stephen M. Ross School of Business University of Michigan Izak Duenyas Stephen M. Ross School of Business University of Michigan Ozge Sahin Johns Hopkins University Ross School of Business Working Paper Working Paper No. 1191 September 2013 This work cannot be used without the author's permission. This paper can be downloaded without charge from the Social Sciences Research Network Electronic Paper Collection: ÜííéWLLëëêåKÅçãL~Äëíê~ÅíZOOUMNQN= = rkfsbopfqv=lc=jf`efd^k= Should Event Organizers Prevent Resale of Tickets? Yao Cui, Izak Duenyas Ross School of Business, University of Michigan, Ann Arbor, MI 48109,
[email protected],
[email protected] Ozge Sahin Carey Business School, Johns Hopkins University, Baltimore, MD 21202,
[email protected] We are interested in whether preventing resale of tickets bene¯ts the capacity providers for sporting and entertainment events. Common wisdom suggests that ticket resale is harmful to event organizers' revenues and event organizers have tried to prevent resale of tickets. For instance, Ticketmaster has recently pro- posed paperless (non-transferrable) ticketing which would severely limit the opportunity to resell tickets. We consider a model that allows resale from both consumers and speculators with di®erent transaction costs for each party. Surprisingly, we ¯nd that this wisdom is incorrect when event organizers use ¯xed pricing policies, in fact event organizers bene¯t from reductions in consumers' (and speculators') transaction costs of resale. Even when multiperiod pricing policies are used, we ¯nd that an event organizer may still bene¯t from ticket resale if his capacity is small.