Inelastic sports pricing
AbstractA recurrent finding in estimates of the gate demand for sports events is pricing in the inelastic portion of demand. With few exceptions, this finding has either been ignored or (rather poorly) explained away. In this paper, the recurrent outcome is detailed and the explanations given by past authors are discussed. Then, profit maximization theory is explored for its inelastic pricing implications. It ends up that the local TV revenue relationships between MLB teams satisfy the situation that theory predicts would generate inelastic gate pricing. This suggests two things. First, inelastic pricing is consistent with profit maximizing team behavior. Second, fuller specification of revenue functions will enhance future work in the area. Copyright © 2004 John Wiley & Sons, Ltd.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.
Volume (Year): 25 (2004)
Issue (Month): 2 ()
Contact details of provider:
Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976
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.:
- Késenne S., 1999.
"Revenue sharing and competitive balance in professional team sports,"
1999019, University of Antwerp, Faculty of Applied Economics.
- Stefan Kesenne, 2000. "Revenue Sharing and Competitive Balance in Professional Team Sports," Journal of Sports Economics, , vol. 1(1), pages 56-65, February.
- Sloane, Peter J, 1971. "The Economics of Professional Football: The Football Club as a Utility Maximiser," Scottish Journal of Political Economy, Scottish Economic Society, vol. 18(2), pages 121-46, June.
- Thomas H. Bruggink, 1993. "National Pastime to Dismal Science: Using Baseball to Illustrate Economic Principles," Eastern Economic Journal, Eastern Economic Association, vol. 19(3), pages 275-294, Summer.
- Daniel, Rascher & Chad, McEvoy & Mark, Nagel & Matt, Brown, 2007. "Variable Ticket Pricing in Major League Baseball," MPRA Paper 25803, University Library of Munich, Germany.
- Rodney Fort, 2004. "Subsidies as incentive mechanisms in sports," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 25(2), pages 95-102.
- Paul Madden, 2008. "Price, quality and welfare consequences of alternative club objectives in a professional sport league," The School of Economics Discussion Paper Series 0802, Economics, The University of Manchester.
- Andersen, Per & Nielsen, Martin, 2013. "Inelastic sports pricing and risk," Economics Letters, Elsevier, vol. 118(2), pages 262-264.
- Young Hoon Lee, 2009. "Estimation of Temporal Variations in Fan Loyalty: Application of Multi-Factor Models," Working Papers 0902, Research Institute for Market Economy, Sogang University, revised 2009.
- Katsushi Imai & Raghav Gaiha & Ganesh Thapa, 2008. "Food and oil prices," The School of Economics Discussion Paper Series 0801, Economics, The University of Manchester.
- Humphreys, Brad R. & Soebbing, Brian P., 2012.
"A test of monopoly price dispersion under demand uncertainty,"
Elsevier, vol. 114(3), pages 304-307.
- Humphreys, Brad & Soebbing, Brian, 2010. "A Test of Monopoly Price Dispersion Under Demand Uncertainty," Working Papers 2010-19, University of Alberta, Department of Economics.
- Ricard Gil & Wesley Hartmann, 2007. "The Role and Determinants of Concession Sales in Movie Theaters: Evidence from the Spanish Exhibition Industry," Review of Industrial Organization, Springer, vol. 30(4), pages 325-347, June.
- Madden, Paul, 2012. "Fan welfare maximization as a club objective in a professional sports league," European Economic Review, Elsevier, vol. 56(3), pages 560-578.
- Dong C. Won & Young H. Lee, 2008. "Optimal dynamic pricing for sports games with habitual attendance," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(8), pages 639-655.
- Brad R. Humphreys & Victor Matheson, 2008.
"PILOTs and Public Policy: Steering through the Economic Ramifications,"
0817, College of the Holy Cross, Department of Economics.
- Brad R. Humphreys & Victor Matheson, 2008. "PILOTs and Public Policy: Steering through the Economic Ramifications," Working Papers 0832, International Association of Sports Economists & North American Association of Sports Economists.
- Paul Madden, 2010. "Fan welfare maximization as a club objective in a professional sports league," The School of Economics Discussion Paper Series 1002, Economics, The University of Manchester.
- Trenton Smith & Young H. Lee, 2006. "Why are Americans Addicted to Baseball? An Empirical Analysis of Fandom in Korea and the U.S," Working Papers 2006-05, School of Economic Sciences, Washington State University.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.