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- Title
Inelastic Sports Pricing.
- Authors
Fort, Rodney
- Abstract
Inelastic ticket pricing for team sports has been a recurrent empirical finding for nearly thirty years. Explanations based on profit maximization range from statistical reasonableness given zero marginal costs to weak data. Still others argue that these results cast doubts on profit maximization as a useful analytical device. In this paper, theoretical conditions are derived where inelastic pricing can happen as a result of profit maximization. There is a particular relationship between individual team local TV revenues, the marginal cost of talent and the average of the rest of the teams' local TV revenues that can lead to inelastic pricing at the gate.
- Subjects
PROFESSIONAL sports; EMPIRICAL research; PROFIT maximization; DIRECT costing; ELASTICITY (Economics); PRICING
- Publication
Managerial & Decision Economics, 2004, Vol 25, Issue 2, p87
- ISSN
0143-6570
- Publication type
Article
- DOI
10.1002/mde.1108