Price Discrimination in Broadway Theater
RAND Journal of Economics, 2004, vol. 35, issue 3, 520-541
A common thread in the theory literature on price discrimination has been the ambiguous welfare effects for consumers and the rise in profit for firms, relative to uniform pricing. In this study I resolve the ambiguity for consumers and quantify the benefit for a firm. I describe a model of price discrimination that includes both second-degree and third-degree price discrimination. Using data from a Broadway play, I estimate the structural model and conduct various experiments to investigate the implications of alternative pricing policies. The observed price discrimination may improve the firm's profit by approximately 5%, relative to uniform pricing, while the difference for aggregate consumer welfare is negligible. Also, I show that the gain from changing prices in the face of fluctuating demand is small under the observed price discrimination.
References: Add references at CitEc
Citations View citations in EconPapers (36) Track citations by RSS feed
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:rje:randje:v:35:y:2004:3:p:520-541
Ordering information: This journal article can be ordered from
https://editorialexp ... i-bin/rje_online.cgi
Access Statistics for this article
More articles in RAND Journal of Economics from The RAND Corporation
Series data maintained by ().