A DEA approach for selecting a bundle of tickets for performing arts events

Abstract

Most performing arts organizations offer their customers the choice of either buying event tickets individually or buying a bundle of tickets for two or more events. During the selection of the bundle to be offered, the theatre manager faces several possible combinations of events. In this paper we tackle the issue of identifying the most efficient subset of the events scheduled to offer as a bundle. We formulate this problem following the choice-based network Revenue Management approach. Assuming the price as fixed on two types of events, lowbrow and highbrow, proposed by the theatre, the purchase decision is modelled on the basis of two random variables: the available time and the reservation price per perfomance. The super-efficiency DEA model will be implemented in order to find the most efficient combination of events to be bundled, defined as the one that offers the most favourable trade-off between expected revenue, attendance, and capacity consumption. A regression of the DEA scores on managerial variables and bundle attributes will allow us to obtain some insights into what determines the efficiency level of a bundle.