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Optimal ticket pricing in professional sports: a social identity approach

Author

Listed:
  • Matthias Peiss

    (Otto-von-Guericke University Magdeburg)

  • Roland Kirstein

    (Otto-von-Guericke University Magdeburg)

Abstract

A frequently observed phenomenon in professional sports is apparent underpricing of tickets. The concept of social identity may explain this pricing behavior without giving up the assumption of profit-maximizing behavior. Repeated match attendance increases spectators' identification with the team and their willingness to pay for attendance. In this paper, we set up a model to analyze a profit-maximizing team's optimal pricing decision including such spectator identification. Conditions are derived under which incentives to underprice arise.

Suggested Citation

  • Matthias Peiss & Roland Kirstein, 2014. "Optimal ticket pricing in professional sports: a social identity approach," Economics Bulletin, AccessEcon, vol. 34(4), pages 2138-2150.
    • Handle: RePEc:ebl:ecbull:eb-14-00869
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    File URL: http://www.accessecon.com/Pubs/EB/2014/Volume34/EB-14-V34-I4-P196.pdf
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    References listed on IDEAS

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    1. Wladimir Andreff & Stefan Szymanski, 2006. "Handbook on the Economics of Sport," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00270122, HAL.
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    3. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-741, September.
    4. Pascal Courty, 2003. "Some Economics of Ticket Resale," Journal of Economic Perspectives, American Economic Association, vol. 17(2), pages 85-97, Spring.
    5. Mahony, Daniel F. & Nakazawa, Makoto & Funk, Daniel C. & James, Jeffrey D. & Gladden, James M., 2002. "Motivational Factors Influencing the Behaviour of J. League Spectators," Sport Management Review, Elsevier, vol. 5(1), pages 1-24, May.
    6. Wladimir Andreff & Stefan Szymanski (ed.), 2006. "Handbook on the Economics of Sport," Books, Edward Elgar Publishing, number 3274.
    7. Craig A. Depken II, 2001. "Fan Loyalty in Professional Sports," Journal of Sports Economics, , vol. 2(3), pages 275-284, August.
    8. Pollak, Robert A, 1970. "Habit Formation and Dynamic Demand Functions," Journal of Political Economy, University of Chicago Press, vol. 78(4), pages 745-763, Part I Ju.
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    Cited by:

    1. Aniruddha Dutta, 2019. "Capacity Allocation of Game Tickets Using Dynamic Pricing," Data, MDPI, vol. 4(4), pages 1-12, October.

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    More about this item

    Keywords

    underpricing; spectator sports; ticket sales; social identity;
    All these keywords.

    JEL classification:

    • D0 - Microeconomics - - General
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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