The Welfare Effects of Ticket Resale

We develop an equilibrium model of ticket resale in which buyers' decisions in the primary market, including costly eorts to \arrive early" to buy underpriced tickets, are based on rational expectations of resale market outcomes. We estimate the parameters of the model using a novel dataset that combines transaction data from both the primary and secondary markets for a sample of major rock concerts. Our estimates indicate that while resale improves allocative eciency, half of the welfare gain from reallocation is oset by increases in costly eort in the arrival game and transaction costs in the resale market.