Ticket pricing for entertainment events under a dual-channel environment: a game-theoretical approach using uncertainty theory

Reza Maihami, Devika Kannan, Mohammad Fattahi, Chunguang Bai*, Iman Ghalehkhondabi

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)

Abstract

The pricing of tickets is a crucial decision when managing entertainment events like concerts, operas, ballets, and theater performances. In this study, we examine the pricing decisions made by two major decision-makers before an entertainment event: the venue and the online retailer. In a game-theoretic approach with uncertain information, the interactions between decision-makers are studied in a single and dual-channel structure. A confidence-level-based uncertainty theory is utilized in order to formulate the amount of uncertainty, and the optimal solutions are analytically computed to maximize the total profit for both players. There are three distinct cases studied, including two single-channel market cases (one in which only the venue sells the tickets, and another in which only the online platform sells the tickets) as well as a dual-channel market case (in which both players sell tickets). Stackelberg and Nash games are used to illustrate the interactions between players in each game. The results indicate the optimal pricing, service level improvement, and total profit for both the venue and the online retailer. Additionally, it is shown that the amount of risk (confidence level) the decision-makers are willing to accept strongly affects the optimal solution. In some cases, the roles of the market participants do not have a significant impact on the optimal solution. The findings of this paper can help practitioners in the entertainment industry make better ticket pricing decisions in an uncertain and competitive environment.
Original languageEnglish
Pages (from-to)1
Number of pages40
JournalAnnals of Operations Research
Early online date10 Feb 2023
DOIs
Publication statusE-pub ahead of print - 10 Feb 2023

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