We estimate an equilibrium model of ticket resale in which consumers' and brokers' decisions in the primary market reflect rational expectations about the resale market. Estimation is based on a unique dataset that merges transaction details from both the primary and secondary markets for tickets to major rock concerts. In our model, the presence of a resale market permits tickets to be traded from low-value to high-value consumers, but it also stimulates costly efforts by consumers and brokers to obtain underpriced tickets in the primary market. We estimate that observed levels of resale increase allocative efficiency by 5% on average, but that a third of this increase is offset by increases in costly rent-seeking in the primary market and transaction costs in the resale market.
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