SENIORITY SEATING AT THE ROYAL-OPERA-HOUSE

This paper examines lotteries and seniority queues as forms of commodi ty bundling price discrimination. There are goad and bad seats, and tw o types of potential purchasers. Offered the choice of a high-priced g ood seat and a moderately-priced bundle of good and bad seats, custome rs self-select into high and low valuation types. For single period pu rchases, the bundle is a lottery over good and bad seats, For repeated purchases, monopolists such as the Royal Opera House can do better by setting up a seniority allocation system.