A New Age of Demand-Based Pricing: An Examination of Dynamic Ticket Pricing and Secondary Market Prices in Major League Baseball

Abstract

In 2010, the San Francisco Giants became the first professional team to implement a comprehensive demand-based ticket pricing strategy called dynamic ticket pricing (DTP). In an effort to understand DTP as a price setting strategy, the current investigation explored Giants’ ticket prices during the 2010 season. First, the relationship between fixed ticket prices, dynamic ticket prices, and secondary market ticket prices for comparable seats were examined. In addition, seat location and price changes over time were examined to identify potential effects on ticket price in the primary and secondary market. Giants’ ticket price data were collected for various games throughout the 2010 season. A purposive selection of 12 games, which included (N= 1,316) ticket price observations, were chosen in an effort to include a multitude of game settings. Two ANOVA models were developed to examine price differences based on pricing structure, market, section, and time. Findings showed significant differences between fixed ticket prices, dynamic ticket prices, and secondary market ticket prices, with fixed ticket prices on the low end and secondary market ticket prices on the high end of the pricing spectrum. Furthermore, time was found to have a significant influence on ticket price; however, the influence of time varied by market and seat location. These findings are discussed and both theoretical and practical implications are considered.

Dynamic ticket pricing and the impact of time – an analysis of price paths of the English soccer club Derby County

“…Shapiro and Drayer (2012) analyzed ticket prices for 12 selected games of the San Francisco Giants in the 2010 season, the first ever year in which a whole sport stadium has been priced dynamically. They reported significant effects for both time and seating category.…”

“…Shapiro and Drayer (2014) as well as Shapiro and Drayer (2012) reported that ticket prices increased continuously towards the day of the match with the application of a DTP system. Yet, a study about consumer expectations revealed that sport fans expected lower ticket prices as the time before the event decreased (Dwyer, Drayer, & Shapiro, 2013).…”

A Dynamic Ticket Pricing Approach for Soccer Games

“…The time from buying the ticket to the starting time of the game is a significant control variable for ticket prices [6]. Two forms of time multiplier are considered, and the behavior of the multipliers is shown in Figures 2 and 3.…”

“…Rascher et al [4] posit that Major League Baseball (MLB) teams could have increased ticket revenues by about 2.8% if they used variable ticket pricing. Dynamic pricing appears to be a promising strategy to optimize ticket prices [5,6].…”

Demand-based pricing in the US theme park industry

“…Academics and practitioners have investigated the application of RM techniques to those other areas. Industries that now apply RM methods include spectator sports (Shapiro and Drayer, 2012), theatre (Healy, 2011;Jones, 2012), foodservice (Hayes and Miller, 2011;Heo, 2013;Heo et al, 2013;Kimes and Beard, 2013), parking (Cooper and McGinty, 2012;Shoup, 2011), taxi and limousine service (Lowrey, 2014;Zhao, 2016), mobile gaming (Murphy, 2015) and many others. Nevertheless, academic applications of RM to the theme park industry have been extremely limited (Heo and Lee, 2009).…”