Can We Find It at the Concessions? Understanding Price Elasticity in Professional Sports

Anthony C. Krautmann and David J. Berri
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Anthony C. Krautmann: DePaul University
David J. Berri: California State University, Bakersfield

Journal of Sports Economics, 2007, vol. 8, issue 2, 183-191

Abstract: The sports economics literature regularly finds that sports teams price admissions in the inelastic range of demand. Given that marginal revenue is negative in this range, yet marginal cost is always nonnegative, this result suggests an inconsistency in the profit motive of owners. In this article, we attempt to explain inelastic ticket pricing by considering the complementarity between tickets sold and concessions. Depending on marginal revenue and cost parameters, we show that it is entirely possible to find profit-maximizing owners pricing tickets in the inelastic region of demand to sell more concessions.

Keywords: concession revenues; inelastic pricing in MLB (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (31)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:jospec:v:8:y:2007:i:2:p:183-191

DOI: 10.1177/1527002505275093

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