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The Pricing of a Round of Golf

Author

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  • James G. Mulligan

    (University of Delaware)

Abstract

This article argues that the use of membership fees at shared facilities, such as private golf courses, is not per se evidence of inefficient pricing as implied by the club theory literature on variable usage. The author reconciles the inconsistency between the predictions of existing models and empirical evidence by accounting for members’ opportunity cost of time and the effect of congestion on members’ utility. In particular, this research shows that the simplified nature of congestion assumed in the literature ignores the positive externalities that members receive from a members-only club.

Suggested Citation

  • James G. Mulligan, 2001. "The Pricing of a Round of Golf," Journal of Sports Economics, , vol. 2(4), pages 328-340, November.
    • Handle: RePEc:sae:jospec:v:2:y:2001:i:4:p:328-340
    DOI: 10.1177/152700250100200402
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    References listed on IDEAS

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    1. Stephen Shmanske, 1998. "Price Discrimination At The Links," Contemporary Economic Policy, Western Economic Association International, vol. 16(3), pages 368-378, July.
    2. Walter Y. Oi, 1971. "A Disneyland Dilemma: Two-Part Tariffs for a Mickey Mouse Monopoly," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 85(1), pages 77-96.
    3. Sandler, Todd & Tschirhart, John, 1997. "Club Theory: Thirty Years Later," Public Choice, Springer, vol. 93(3-4), pages 335-355, December.
    4. Stephen Shmanske, 1999. "The economics of golf course condition and beauty," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 27(3), pages 301-313, September.
    5. Robert W. Helsley & William C. Strange, 1991. "Exclusion and the Theory of Clubs," Canadian Journal of Economics, Canadian Economics Association, vol. 24(4), pages 889-899, November.
    6. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185.
    7. Cowen, Tyler & Glazer, Amihai, 1991. "Ski-Lift Pricing with Applications to Labor and Other Markets: Comment," American Economic Review, American Economic Association, vol. 81(1), pages 376-377, March.
    8. Suzanne Scotchmer, 1985. "Two-Tier Pricing of Shared Facilities in a Free-Entry Equilibrium," RAND Journal of Economics, The RAND Corporation, vol. 16(4), pages 456-472, Winter.
    9. Berglas, Eitan, 1976. "On the Theory of Clubs," American Economic Review, American Economic Association, vol. 66(2), pages 116-121, May.
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    Cited by:

    1. John Loomis & Omer Tadjion & Philip Watson & Josh Wilson & Stephen Davies & Dawn Thilmany, 2009. "A Hybrid Individual—Zonal Travel Cost Model for Estimating the Consumer Surplus of Golfing in Colorado," Journal of Sports Economics, , vol. 10(2), pages 155-167, April.
    2. Frank Limehouse & Michael Maloney & Kurt Rotthoff, 2012. "Peak-Load Versus Discriminatory Pricing: Evidence from the Golf Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 40(3), pages 151-165, May.
    3. Johan Lundberg & Sofia Lundberg, 2004. "Join the Club - On the Attractiveness of Golf Club Membership," ERSA conference papers ersa04p242, European Regional Science Association.

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