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An examination of underlying consumer demand and sport pricing using secondary market data

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Author Info

  • Drayer, Joris
  • Rascher, Daniel A.
  • McEvoy, Chad D.

Abstract

The growth of the secondary ticket market has given sport managers a new way to understand consumer demand for tickets. In the secondary market, transaction prices and the number of transactions are highly variable and respond directly to consumer preferences, making it ripe for exploration. Using secondary market data for the NFL provided by a secondary market firm, the purpose of the current study is to understand a variety of traditional sport economics issues such as demand, consumer surplus, and pricing (in)efficiency. Results show that secondary market prices, instead of number of transactions, respond to the factors commonly associated with consumer demand. Further, the data indicate that teams may be able to sell 20,000 additional seats for each game. However, given that teams cannot easily add this number of seats (and may not want to given the NFL's blackout rule), there is approximately $260,000 in consumer surplus per game that is captured by resellers.

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Bibliographic Info

Article provided by Elsevier in its journal Sport Management Review.

Volume (Year): 15 (2012)
Issue (Month): 4 ()
Pages: 448-460

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Handle: RePEc:eee:spomar:v:15:y:2012:i:4:p:448-460

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Related research

Keywords: Consumer demand; Sport pricing; Consumer surplus; Price inefficiency; Secondary market; Tickets;

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  1. Daniel, Rascher & Chad, McEvoy & Mark, Nagel & Matt, Brown, 2007. "Variable Ticket Pricing in Major League Baseball," MPRA Paper 25803, University Library of Munich, Germany.
  2. Stephen K. Happel and Marianne M. Jennings, 1995. "The Folly of Anti-Scalping Laws," Cato Journal, Cato Journal, Cato Institute, vol. 15(1), pages 65-80, Spring/Su.
  3. Drayer, Joris & Martin, Nathan T., 2010. "Establishing legitimacy in the secondary ticket market: A case study of an NFL market," Sport Management Review, Elsevier, vol. 13(1), pages 39-49, February.
  4. Jeffery Borland, 2003. "Demand for Sport," Oxford Review of Economic Policy, Oxford University Press, vol. 19(4), pages 478-502, Winter.
  5. Karp, Larry S. & Perloff, Jeffrey M, 2003. "When promoters like scalpers," CUDARE Working Paper Series 916R, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
  6. Courty, Pascal, 2003. "Ticket Pricing under Demand Uncertainty," Journal of Law and Economics, University of Chicago Press, vol. 46(2), pages 627-52, October.
  7. Stefan Szymanski, 2003. "The Economic Design of Sporting Contests," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1137-1187, December.
  8. Victor Matheson, 2006. "The effects of labour strikes on consumer demand in professional sports: revisited," Applied Economics, Taylor & Francis Journals, vol. 38(10), pages 1173-1179.
  9. Alexander, Donald L. & Kern, William & Neill, Jon, 2000. "Valuing the Consumption Benefits from Professional Sports Franchises," Journal of Urban Economics, Elsevier, vol. 48(2), pages 321-337, September.
  10. Daniel, Rascher, 1999. "A Test of the Optimal Positive Production Network Externality in Major League Baseball," MPRA Paper 25832, University Library of Munich, Germany.
  11. Pascal Courty & Mario Pagliero, 2012. "The Impact of Price Discrimination on Revenue: Evidence from the Concert Industry," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 359-369, February.
  12. Drayer, Joris & Shapiro, Stephen L., 2011. "An examination into the factors that influence consumers’ perceptions of value," Sport Management Review, Elsevier, vol. 14(4), pages 389-398.
  13. Sherwin Rosen & Andy Rosenfield, 1995. "Ticket Pricing," University of Chicago - George G. Stigler Center for Study of Economy and State 120, Chicago - Center for Study of Economy and State.
  14. Falter, J.-M. & Perignon, C., 2000. "Demand for Football and Intra-Match Winning Probability: an Essay on the Glorious Uncertainty of Sports," Research Papers by the Department of Economics, University of Geneva 2000.15, Département des Sciences Économiques, Université de Genève.
  15. Zane A. Spindler, 2003. "How “Parasites” Serve their Host: A Graphical Analysis of “Scalping”," Public Finance Review, , vol. 31(6), pages 694-699, November.
  16. Asparouhova, Elena & Bossaerts, Peter & Plott, Charles, 2003. "Excess demand and equilibration in multi-security financial markets: the empirical evidence," Journal of Financial Markets, Elsevier, vol. 6(1), pages 1-21, January.
  17. repec:fth:geneec:00.04 is not listed on IDEAS
  18. Phillip Leslie & Alan Sorensen, 2009. "The Welfare Effects of Ticket Resale," NBER Working Papers 15476, National Bureau of Economic Research, Inc.
  19. Peck, James, 1996. "Demand Uncertainty, Incomplete Markets, and the Optimality of Rationing," Journal of Economic Theory, Elsevier, vol. 70(2), pages 342-363, August.
  20. Carmon, Ziv & Ariely, Dan, 2000. " Focusing on the Forgone: How Value Can Appear So Different to Buyers and Sellers," Journal of Consumer Research, University of Chicago Press, vol. 27(3), pages 360-70, December.
  21. Pascal Courty, 2003. "Some Economics of Ticket Resale," Journal of Economic Perspectives, American Economic Association, vol. 17(2), pages 85-97, Spring.
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