I don't stand alone. I stand with the ones that see my imperfections and still love me more than the ones who only get to see my life in highlights! #WeWades #azionvacay #Rome
the summary of the Dynamics of Pricing Tickets for Broadway Shows
lots of people(around25000)attend Broadway shows which had been holding in NewYork every night. It is interesting that there has a different raising between the top ticket price and the actual price paid.
Discounting played a important role in the result of difference and can be got in various of ways though the TKTS booth which located in Times Square.
Because the tickets of theater is perishable,like tickets of airplane,the tickets would be not valuable after the theater beginning.Obviously,how to collect data from consumers and sufficiently sale more and more tickets are very necessary. Phillip Leslie who is a Stanford economist found that the combination of quality variation and discounts led to widely varying ticket prices.Also the prices and discounting policy set by the producers try to use heterogeneity to let different people to pay for tickets by their willingness,just like those who can easily afford tickets choose to pay full price and those who want to pay less choose to wait in line at TKTS.
Definitely, at present,it is very easy to collect data for sellers thanks to development of computer,so we could maximize our benefits though serving various of tickets,rather than sale one type of ticket alone.
The Dynamics of Pricing Tickets for Broadway Shows
BY HAL R. VARIAN
Every night in New York, about 25,000 people, on average, attend Broadway shows.
As avid theatergoers know, ticket prices have been rising inexorably. The top ticket price for Broadway shows has risen 31 percent since 1998. But the actual price paid has gone up by only 24 percent.
The difference is a result of discounting. Savvy fans know that there are deals avail- able for even the most popular shows, with the most popular discounts being offered through coupons, two-for-one deals, special prices for students, and through the TKTS booth in Times Square.
Why so much discounting? The value of a seat in a theater, like a seat on an airplane, is highly perishable. Once the show starts or the plane takes off, a seat is worth next to nothing.
In both industries, sellers use a variety of strategies to try to ensure that the seats are sold to those who are willing to pay the most.
This phenomenon was examined recently by a Stanford economist, Phillip Leslie, in an article, “Price Discrimination in Broadway Theater,” published in the autumn 2004 issue of the RAND Journal of Economics.
Mr. Leslie was able to collect detailed data on a 1996 Broadway play, “Seven Guitars.” Over 140,000 people saw this play, and they bought tickets in 17 price categories. Some price variation was due to the quality of the seats—orchestra, mezzanine, balcony and so on—while other price differences were a result of various forms of discounting.
The combination of quality variation and discounts led to widely varying ticket prices. The average difference of two tickets chosen at random on a given night was about 40 percent of the average price. This is comparable to the price variation in airline tickets. . . .
The ticket promotions also varied over the 199 performances of the show. Targeted direct mail was used early on, while two-for- one tickets were not introduced until about halfway through the run.
The tickets offered for sale at the TKTS booth in Times Square are typically orchestra seats, the best category of seats available.
But the discounted tickets at TKTS tend to be the lower-quality orchestra seats. They sell at a fixed discount of 50 percent, but are offered only for performances that day.
Mr. Leslie’s goal was primarily to model the behavior of the theatergoer. The audience for Broadway shows is highly diverse. About 10 percent, according to a 1991 survey conducted by Broadway producers, had household incomes of $25,000 or $35,000 while an equal number had incomes over $150,000 (in 1990 dollars).
The prices and discounting policy set by the producers of Broadway shows try to use this heterogeneity to get people to sort themselves by their willingness to pay for tickets.
You probably will not see Donald Trump waiting in line at TKTS; presumably, those in his income class do not mind paying full price. But a lot of students, unemployed actors and tourists do use TKTS.
Yes, it is inconvenient to wait in line at TKTS. But that is the point. If it weren’t inconvenient, everyone would do it, and this would result in substantially lower revenues for Broadway shows.
Mr. Leslie uses some advanced econometric techniques to estimate the values that different income groups put on the various categories of tickets. He finds that Broadway producers do a pretty good job, in general, at maximizing revenue. . . .
We are likely to see more and more goods and services sold using the same sort of differential pricing. As more and more transactions become computer-mediated, it becomes easier for sellers to collect data, to experiment with pricing and to analyze the results of those experiments.
This, of course, makes life more complicated for us consumers. The flip side is that pricing variations make those good deals more likely.
Last time I was in New York, I was pleased that I managed to get a ticket to “The Producers” for half price. It almost made up for the fact that I had to book my airline ticket two weeks in advance and stay over a Saturday night.