Increasing Ticketing Allocative Efficiency Using Marginal Price Auction Theory

TL;DR

This paper proposes a marginal price auction-based ticketing protocol that improves allocative efficiency, fairness, and revenue extraction compared to traditional first-come-first-serve systems, with game-theoretic validation.

Contribution

It introduces a novel auction-based ticketing protocol that enhances efficiency and revenue, supported by game theory analysis and proofs of improved allocation and anti-scalping effects.

Findings

Protocol allocates tickets to highest bidders efficiently.

It extracts more economic rents for organizers.

Reduces non-optimal scalping under certain utilities.

Abstract

Most modern ticketing systems rely on a first-come-first-serve or randomized allocation system to determine the allocation of tickets. Such systems has received considerable backlash in recent years due to its inequitable allotment and allocative inefficiency. We analyze a ticketing protocol based on a variation of the marginal price auction system. Users submit bids to the protocol based on their own utilities. The protocol awards tickets to the highest bidders and determines the final ticket price paid by all bidders using the lowest winning submitted bid. Game theoretic proof is provided to ensure the protocol more efficiently allocates the tickets to the bidders with the highest utilities. We also prove that the protocol extracts more economic rents for the event organizers and the non-optimality of ticket scalping under time-invariant bidder utilities.