Hannah Montana and the Tour of Doom

With scalpers and online secondary markets like eBay driving up the cost of concert tickets, is there a better way to set prices that would protect revenue without inciting the ire of fans?
Costis Maglaras  | Fall 2010
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In 2007, Miley Cyrus went on her first concert tour, performing both as herself and in character as Hannah Montana. Tickets with a retail price of $20 to $60 sold out within minutes, only to be resold on secondary online markets like eBay and StubHub at prices of $500 and up. Many of Cyrus's devoted young fans were outraged, and their anger threatened to undermine Cyrus's popularity and the reputation of the ticketing agency. In this case, students find the optimal pricing scheme for one of Cyrus's concerts that would maximize revenue for the artist, venues, the ticketing agency; decrease the revenue "stolen" by resellers; and satisfy fans with limited budgets.

Case ID: 100206
Supplemental Materials: Solutions Spreadsheets , Hannah Montana Dataset

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