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Abstract
An entertainment supply chain (ESC) includes performer, promoters, event facility, and online ticket agencies. Determining the right ticket price is a vital decision that remarkably affects the profit of the entertainment supply chain players. Moreover, in some cases, the ticket price is the primal factor for audiences to attend an event. Pricing is indicated by the interactions between various stockholders in the ESC. In this study, we present a game-theoretical method to examine the ticket pricing in an ESC such as music concert, live show, ballet, and theater plays. Integrated, Stackelberg and Nash models are studied to reflect the real market channel condition in ESC. The result highlights the optimal ticket price and total profit for members of ESC. Further, the optimal decision for each player according to its role (leader or follower) in ESC is investigated. The results indicated that centralized ESC, in which a central company manages ticket selling process, makes more profit rather than decentralized structure. It is also proved that the role of event center does not change its total profit remarkably. The finding of this paper can be applied by entertainment industry practitioners to make a better decision about pricing strategy under competitive market.
Keywords
Pricing, Entertainment Supply Chain, Game Theory
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1.INTRODUCTION
An entertainment supply chain (ESC) consists of multiple partners such as event center, promoters, agents, performers and ticket seller. The service flow in an ESC starts with a performer's agent that asks a promoter to hold an event for its performer. Then, the promotor will select an event center or venue to run the show. Besides, tickets are sold through venue booth, ticket agencies, and online platform such as Ticketmaster. The ticket pricing is an important decision for many entertainment events. Although some big fans do not consider the price to attend the event of their favorite artists, the price still is the primal factor for many audiences to attend an event.
The researchers indicated the factors that may impact the demand level for an event, but the demand rate is generally uncertain. On one hand, the demand definitely depends on price. On the other hand, the total profit for ESC players is determined by the volume of demand. We conclude...