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Subsidized Monopolists and Product Prices: The Case of Major League Baseball

Author

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  • Phillip Miller

    (Department of Economics, Minnesota State University)

Abstract

In this paper, I analyze the setting of ticket prices when teams receive subsidization from the public. I model teams as entertainment providers, where entertainment is generated by selling wins and amenities. I argue that subsidization of teams generally comes from subsidizing the amenities in and surrounding the teams’ stadiums. Subsidization of the amenities lowers the marginal cost of providing them to fans and should drive ticket prices lower. The empirical analysis suggests that this is the case.

Suggested Citation

  • Phillip Miller, 2006. "Subsidized Monopolists and Product Prices: The Case of Major League Baseball," Working Papers 0629, International Association of Sports Economists;North American Association of Sports Economists.
    • Handle: RePEc:spe:wpaper:0629
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    File URL: http://web.holycross.edu/RePEc/spe/Miller_MonopolyPricing.pdf
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    Cited by:

    1. Geoffrey Propheter, 2017. "Subsidies and Stadia’ Opulence," Journal of Sports Economics, , vol. 18(1), pages 3-18, January.

    More about this item

    Keywords

    Sports; Baseball;

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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