A Test of Monopoly Price Dispersion Under Demand Uncertainty
AbstractDana (2001) developed a model of price dispersion under demand uncertainty. The model predicts that, in the face of uncertain demand and inflexible prices, monopolists maximizes pro fits using ex ante price discrimination. We test the predictions of this model using a unique data set from Major League Baseball (MLB). Estimation of a two-way fixed effects model indicate that ticket price dispersion changes systematically with demand uncertainty in MLB, verifying the predictions of the model.
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Bibliographic InfoPaper provided by University of Alberta, Department of Economics in its series Working Papers with number 2010-19.
Length: 10 pages
Date of creation: 07 Dec 2010
Date of revision:
price dispersion; demand uncertainty; sports;
Other versions of this item:
- Humphreys, Brad R. & Soebbing, Brian P., 2012. "A test of monopoly price dispersion under demand uncertainty," Economics Letters, Elsevier, vol. 114(3), pages 304-307.
- D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
- L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-23 (All new papers)
- NEP-COM-2010-12-23 (Industrial Competition)
- NEP-IND-2010-12-23 (Industrial Organization)
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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