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Optimal ticket pricing in professional sports: a social identity approach

Author

Listed:
  • Matthias Peiss

    (Otto-von-Guericke University Magdeburg)

  • Roland Kirstein

    (Otto-von-Guericke University Magdeburg)

Abstract

A frequently observed phenomenon in professional sports is apparent underpricing of tickets. The concept of social identity may explain this pricing behavior without giving up the assumption of profit-maximizing behavior. Repeated match attendance increases spectators' identification with the team and their willingness to pay for attendance. In this paper, we set up a model to analyze a profit-maximizing team's optimal pricing decision including such spectator identification. Conditions are derived under which incentives to underprice arise.

Suggested Citation

  • Matthias Peiss & Roland Kirstein, 2014. "Optimal ticket pricing in professional sports: a social identity approach," Economics Bulletin, AccessEcon, vol. 34(4), pages 2138-2150.
    • Handle: RePEc:ebl:ecbull:eb-14-00869
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2014/Volume34/EB-14-V34-I4-P196.pdf
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    References listed on IDEAS

    as
    1. Wladimir Andreff & Stefan Szymanski (ed.), 2006. "Handbook on the Economics of Sport," Books, Edward Elgar Publishing, number 3274.
    2. Wladimir Andreff & Stefan Szymanski, 2006. "Handbook on the Economics of Sport," Post-Print halshs-00275933, HAL.
    3. Becker, Gary S, 1991. "A Note on Restaurant Pricing and Other Examples of Social Influences on Price," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 1109-1116, October.
    4. Craig A. Depken II, 2001. "Fan Loyalty in Professional Sports," Journal of Sports Economics, , vol. 2(3), pages 275-284, August.
    5. Pascal Courty, 2003. "Some Economics of Ticket Resale," Journal of Economic Perspectives, American Economic Association, vol. 17(2), pages 85-97, Spring.
    6. Mahony, Daniel F. & Nakazawa, Makoto & Funk, Daniel C. & James, Jeffrey D. & Gladden, James M., 2002. "Motivational Factors Influencing the Behaviour of J. League Spectators," Sport Management Review, Elsevier, vol. 5(1), pages 1-24, May.
    7. Pollak, Robert A, 1970. "Habit Formation and Dynamic Demand Functions," Journal of Political Economy, University of Chicago Press, vol. 78(4), pages 745-763, Part I Ju.
    8. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-741, September.
    9. Anthony C. Krautmann & David J. Berri, 2007. "Can We Find It at the Concessions? Understanding Price Elasticity in Professional Sports," Journal of Sports Economics, , vol. 8(2), pages 183-191, May.
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    Cited by:

    1. Aniruddha Dutta, 2019. "Capacity Allocation of Game Tickets Using Dynamic Pricing," Data, MDPI, vol. 4(4), pages 1-12, October.

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    More about this item

    Keywords

    underpricing; spectator sports; ticket sales; social identity;
    All these keywords.

    JEL classification:

    • D0 - Microeconomics - - General
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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