A Study on Pricing-System in the Theater Industry using Multi-agent Simulation

Abstract

In general, ticket prices in theaters are fixed according to the quality of seats. However, it is difficult to set ticket prices properly reflecting consumers' reservation prices. Thus, the current fixed price does not attain the best efficient allocation. In this paper, we develop a model of seat reservation in theater by using auction theory. Then, we analyze differences between our model and fixed price model with multi-agent simulation. Additionally, we compare simulation results with Nash equilibrium that is derived under complete information. As a result, three important points are found: (1) the proposed model can make the number of sales larger than current one, (2) our model realizes higher social surplus than all fixed price model, and (3) comparing with fixed unique-price models where only unique price is set for several seats, the proposed model shows higher consumers' surplus and higher producer's surplus even in different situations.