The Revenue Gains from Multi‐Tier Ticket Pricing: Evidence from Pop Music Concerts

We provide empirical estimates of the revenue benefits of multi‐tier pricing at a major US pop music venue. Our unique sample includes data on the number of tickets sold at every price. Mean revenue gain from multi‐tier pricing is estimated to be about $20,000 per show, a 4.2% increase over uniform pricing, although the gains were as high as 21.2% for one performer. We also provide evidence that customer segmentation by income is a likely motive of multi‐tier pricing and, for the first time, that the standard assumption of zero marginal cost of additional venue attendees is valid. Copyright © 2012 John Wiley & Sons, Ltd.