Is Resale Needed in Markets with Refunds? Evidence from College Football Ticket Sales

ABSTRACT In what circumstances is allowing resale more efficient than providing refunds? I study common aftermarket policies in perishable goods markets with demand uncertainty. Using primary and resale market data on college football ticket sales, I estimate a structural model comparing resale, which has flexible prices but incurs frictions, to a partial refund scheme, which is centralized but has rigid prices. In the model, consumers anticipate shocks when making initial purchases, then engage in resale after shocks are realized. Because of resale frictions, refunds are more efficient on average. However, flexible prices make resale more efficient after large aggregate shocks.