Other Implications of Separating Purchase and Consumption

(although usually there is no loss in aggregate consumer surplus). These profits are possible despite a service pro-vider’s inability to price discriminate. Assuming immediate consumption overlooks a rich aspect of behavior. In reality, buyers often inventory manufactured products for future consumption. Moreover, buyers often purchase services well before the time of con-sumption. Travel agents, for example, may sell vacation-ers vouchers for shuttle services from the airport to the hotel well in advance of the trip. Advance purchasing is quite common in many industries including travel, enter-tainment, and personal services (Shugan and Xie 1997). Buyers can advance purchase tickets, stamps, tokens, per-sonal vouchers, passes, or other certifications good for consumption during a specified period from tour opera-tors, sporting events organizers, and so on. Although purchase and consumption already occur at different times, past technological constraints limited its domain. Were amusement parks to advance sell dis-age would be pos-kets to resell them cket scalping lim-iscount while sell-are making arbi-ards, now used by a magnetic strip. ecause buyers are verify a ticket’s e article. We would ings in Syracuse for Lewis, and RichardWe should differentiate between the act of purchasing and the act of consuming. When purchasing manufactured goods or services, we often implicitly assume that buyers receive utility at the time of purchase. Although utilities do drive choices (e.g., Hauser and Urban 1979, Hauser and Wernerfelt 1990), the utility from consumption may occur in the distant future. counted entry tickets, for example, arbitr sible. Scalpers could buy discounted tic at higher prices at a future date. This ti ited a firm’s ability to advance sell at a d ing full price at the gate. Technological advances, however, trage more difficult. Smart tickets or c Disney, securely embed information on The black market for tickets disappears b unable to read the magnetic strips and The authors are listed in alphabetical order for lexicographic convenience; both authors contributed equally to t