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Revenue and attendance simultaneous optimization in performing arts organizations

  • Andrea Baldin
  • Trine Bille
  • Andrea Ellero
  • Daniela Favaretto
Original Article

Abstract

Performing arts organizations are characterized by different objectives other than revenue. Even if, on the one hand, theaters aim to increase revenue from box office as a consequence of the systematic reduction in public funds; on the other hand, they pursue the objective to increase its attendance. A common practice by theaters is to provide incentives to customers to discriminate among themselves according to their reservation price, offering a schedule of different prices corresponding to different seats in the venue. In this context, price and allocation of the theater seating area is decision variables that allow theater managers to manage their two conflicting goals to be pursued. In this paper, we introduce a multi-objective optimization model that jointly considers pricing and seat allocation. The framework proposed integrates a choice model estimated by multinomial logit model and the demand forecast, taking into account the impact of heterogeneity among customer categories in both choice and demand. The proposed model is validated with booking data referring to the Royal Danish theater during the period 2010–2015.

Keywords

Multi-objective optimization Pricing Seat allocation Multinomial logit model Theater demand 

JEL Classification

C35 C61 L11 Z11 

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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Department of Management, Politics and PhilosophyCopenhagen Business SchoolFrederiksbergDenmark
  2. 2.Department of ManagementCa’ Foscari University of VeniceVeniceItaly

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