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Sport tickets pricing strategy with home team's crowd effect

Author

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  • Xin Meng
  • Zilin Tang
  • Leonard F. S. Wang

Abstract

This paper investigates the impact of the crowd effect and financing constraints on pricing strategy by constructing an intertemporal model and introducing the crowd effect into a monopolistic home team's decision‐making framework. The results demonstrate that a stronger crowd effect and a larger depreciation rate are always beneficial to the expected profits of the home team and the home team may price along the inelastic portion of the static demand curve in periods 1–3, as long as the expected deferred marginal revenue and the additive price from the performance of the preceding match are sufficiently large.

Suggested Citation

  • Xin Meng & Zilin Tang & Leonard F. S. Wang, 2023. "Sport tickets pricing strategy with home team's crowd effect," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(2), pages 839-847, March.
    • Handle: RePEc:wly:mgtdec:v:44:y:2023:i:2:p:839-847
    DOI: 10.1002/mde.3715
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    References listed on IDEAS

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    1. Andersen, Per & Vetter, Henrik, 2015. "Pricing as a risky choice: Uncertainty and survival in a monopoly market," Economics Discussion Papers 2015-53, Kiel Institute for the World Economy (IfW Kiel).
    2. Andersen, Per & Vetter, Henrik, 2015. "Pricing as a risky choice: Uncertainty and survival in a monopoly market," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 9, pages 1-22.
    3. Jason Winfree & Jill McCluskey & Ron Mittelhammer & Rodney Fort, 2004. "Location and attendance in major league baseball," Applied Economics, Taylor & Francis Journals, vol. 36(19), pages 2117-2124.
    4. Mark D. Groza, 2010. "NCAA conference realignment and football game day attendance," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 31(8), pages 517-529, December.
    5. Andersen, Per & Nielsen, Martin, 2013. "Inelastic sports pricing and risk," Economics Letters, Elsevier, vol. 118(2), pages 262-264.
    6. repec:eme:mfppss:v:42:y:2016:i:9:p:922-927 is not listed on IDEAS
    7. Anthony C. Krautmann & David J. Berri, 2007. "Can We Find It at the Concessions? Understanding Price Elasticity in Professional Sports," Journal of Sports Economics, , vol. 8(2), pages 183-191, May.
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    Cited by:

    1. Kopalle, Praveen K. & Pauwels, Koen & Akella, Laxminarayana Yashaswy & Gangwar, Manish, 2023. "Dynamic pricing: Definition, implications for managers, and future research directions," Journal of Retailing, Elsevier, vol. 99(4), pages 580-593.

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