Revenue and Attendance Simultaneous Optimization in Performing Arts Organizations

Andrea Baldin, Trine Bille, Andrea Ellero, Daniela Favaretto

Research output: Contribution to journalJournal articleResearchpeer-review

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.
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.
LanguageEnglish
JournalJournal of Cultural Economics
Number of pages24
ISSN0885-2545
DOIs
StatePublished - 3 May 2018

Bibliographical note

Epub ahead of print. Published online: 3. May 2018

Keywords

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

Cite this

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title = "Revenue and Attendance Simultaneous Optimization in Performing Arts Organizations",
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, Multi-objective optimization, Pricing, Seat allocation, Multinomial logit model, Theater demand",
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year = "2018",
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doi = "10.1007/s10824-018-9323-7",
language = "English",
journal = "Journal of Cultural Economics",
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Revenue and Attendance Simultaneous Optimization in Performing Arts Organizations. / Baldin, Andrea; Bille, Trine; Ellero, Andrea; Favaretto, Daniela.

In: Journal of Cultural Economics, 03.05.2018.

Research output: Contribution to journalJournal articleResearchpeer-review

TY - JOUR

T1 - Revenue and Attendance Simultaneous Optimization in Performing Arts Organizations

AU - Baldin,Andrea

AU - Bille,Trine

AU - Ellero,Andrea

AU - Favaretto,Daniela

N1 - Epub ahead of print. Published online: 3. May 2018

PY - 2018/5/3

Y1 - 2018/5/3

N2 - 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.

AB - 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.

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KW - Pricing

KW - Seat allocation

KW - Multinomial logit model

KW - Theater demand

KW - Multi-objective optimization

KW - Pricing

KW - Seat allocation

KW - Multinomial logit model

KW - Theater demand

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