The Effect of Price Dispersion on Major League Baseball Team Attendance

Abstract

Price dispersion reflects ignorance in the marketplace in which different prices exist from the same or different sellers for a similar good. One of the sources of price dispersion is uncertain demand for a business's good or service. Ticket markets are good opportunities to examine a firm's pricing strategy under demand uncertainty, because professional sports teams have to price their tickets well in advance of the actual event and before actual demand is known. The purpose of the present research is to examine the relationship between price dispersion and regular season average attendance in Major League Baseball. Using a two-step generalized method of moments (GMM) model, the present research finds that an increase in price dispersion leads to a decrease in average attendance.

Big Data and Analytics in Sport Management

“…In this manner, studies that have incorporated information about ticket prices have generally used the lowest price or average price to consider the relationship between consumer interest in sport and price (Coates & Humphreys, 2007). However, with advances in ticket pricing methods used by organizations, including variable ticket pricing (Rascher, McEvoy, Nagel, & Brown, 2007), price dispersion (Soebbing & Watanabe, 2014), and dynamic ticket pricing (Drayer, Shapiro, & Lee, 2012;, understanding how consumers react to price has become a more dynamic and complicated process. As such, recording a single price for a ticket is not sufficient.…”

Factors Influencing The Fans Decision Between Genders to Attend Football Matches at Larkin Stadium

“…This represents the market's misunderstanding of the inclination for consumer purchases and activities (Jr., 2016). The main cause of this price spread is due to the company being completely unsure about the type of goods and they are also not sure to provide services to the goods they sell (Soebbing, 2014).…”

“…The supporters will also always talk about the status of their team whenever there are friends or relatives as well as their acquaintances that represent the team. This can indirectly strengthen the relationship between the team and their fans for a long time (Soebbing, 2014) (Hill, 2000). The supporters or fans also want to hang out and take pictures with their favorite players.…”

Hashmoney: exploring Twitter hashtag use as a secondary ticket market price determinant

“…Levin and McDonald (2009) relied on an empirical approach, collecting attendance figures for smaller professional leagues and other market variables to determine the effect of competitive balance on attendance. Within Major League Baseball, variable pricing (Rascher et al, 2007), price discrimination (Rascher and Schwarz, 2012), and dispersion (Soebbing and Watanabe, 2014) have been examined for their effect on prices and attendance. Other factors that have been studied with respect to ticket pricing include stadium age (Humphreys and Soebbing, 2012) and the influence of image on a team's sales (Beccarini and Ferrand, 2006).…”