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An examination of dynamic ticket pricing and secondary market price determinants in Major League Baseball

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  • Shapiro, Stephen L.
  • Drayer, Joris

Abstract

Over the past several years, professional sport organizations have started to shift from cost-based ticket pricing strategies to a demand-based focus, where price considerations are driven, in part, by market demand. Dynamic ticket pricing (DTP), where prices fluctuate daily based on market factors, evolved from this transition. The motivation for DTP stems from the significant growth of the secondary ticket market, where ticket prices are almost completely demand driven. One issue with this strategy is the limited understanding of specific factors that influence dynamically priced tickets and secondary market tickets. The current study examined price determinants in the primary market where DTP has been implemented and comparable tickets in the secondary market. Four regression models were developed for this purpose. The first two models examined factors influencing dynamic ticket price. Both DTP models were found to be significant, explaining 91.4% and 70.8% of the variance in dynamic price, respectively. The second two models examined factors influencing secondary market ticket price. Both secondary market models were found to be significant, explaining 82.7% and 79.7% of the variance in secondary market price, respectively. There were many consistencies between models, including an emphasis on team and individual performance factors, ticket-related factors, and time-related factors. However, there were a number of unique aspects to each model, which may help sport managers develop pricing strategies that better reflect market demand for sport

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  • Shapiro, Stephen L. & Drayer, Joris, 2014. "An examination of dynamic ticket pricing and secondary market price determinants in Major League Baseball," Sport Management Review, Elsevier, vol. 17(2), pages 145-159.
    • Handle: RePEc:eee:spomar:v:17:y:2014:i:2:p:145-159
    DOI: 10.1016/j.smr.2013.05.002
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    References listed on IDEAS

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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. 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.
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    4. Joris Drayer & Daniel A. Rascher & Chad D. McEvoy, 2012. "An examination of underlying consumer demand and sport pricing using secondary market data," Sport Management Review, Taylor & Francis Journals, vol. 15(4), pages 448-460, October.
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    6. Joris Drayer & Stephen L. Shapiro, 2011. "An examination into the factors that influence consumers’ perceptions of value," Sport Management Review, Taylor & Francis Journals, vol. 14(4), pages 389-398, October.
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    4. J. James Reade & Carl Singleton, 2020. "Demand for Public Events in the COVID-19 Pandemic: A Case Study of European Football," Economics Discussion Papers em-dp2020-09, Department of Economics, University of Reading, revised 01 Oct 2020.
    5. Jung-Sup Bae & Weisheng Chiu & Sang-Back Nam, 2021. "Sport Fans’ Price Sensitivity Based on Loyalty Levels: A Case of Korean Professional Baseball League," Sustainability, MDPI, vol. 13(6), pages 1-13, March.
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    8. Young Dae Ko & Seung Hwan Jung & Sung Hee Kim & Sung Wook Lee, 2018. "Sustainable Sport Scheduling Approach Considering Team Equity for the Korean Professional Baseball League," Sustainability, MDPI, vol. 10(2), pages 1-11, February.

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