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The Impact of Variable Pricing, Dynamic Pricing, and Sponsored Secondary Markets in Major League Baseball

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  • Pascal Courty
  • Luke Davey

Abstract

Toward the end of the 1990s and into the 2000s, Major League Baseball teams moved away from fixed ticket prices, to first setting prices according to expected game demand, and subsequently to dynamically changing prices in response to demand. Teams have also collaborated with secondary ticket marketplaces to sponsor resale. By exploiting a team panel covering seasons 1999-2017, we use fixed effect models to estimate the impact of these pricing innovations on team revenue and team value. Variable pricing increases revenue and team value by 4.2% and 9.5%, respectively. The introduction of dynamic pricing and sponsored secondary markets has no statistically significant effect on revenue or team value.

Suggested Citation

  • Pascal Courty & Luke Davey, 2020. "The Impact of Variable Pricing, Dynamic Pricing, and Sponsored Secondary Markets in Major League Baseball," Journal of Sports Economics, , vol. 21(2), pages 115-138, February.
    • Handle: RePEc:sae:jospec:v:21:y:2020:i:2:p:115-138
    DOI: 10.1177/1527002519867367
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    3. Kyle D. S. Maclean & Fredrik Ødegaard, 2023. "Revenue implications of celebrities on Broadway theatre," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 22(3), pages 207-218, June.
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    5. Jeremy K. Nguyen & Adam Karg & Abbas Valadkhani & Heath McDonald, 2022. "Predicting individual event attendance with machine learning: a ‘step-forward’ approach," Applied Economics, Taylor & Francis Journals, vol. 54(27), pages 3138-3153, June.
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    7. Dylan Thompson, 2024. "Front row or backstage? Evidence on concert ticket preferences from a discrete choice experiment," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 48(3), pages 463-491, September.

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