A Test of Monopoly Price Dispersion Under Demand Uncertainty

Brad Humphreys and Brian Soebbing

No 2010-19, Working Papers from University of Alberta, Department of Economics

Abstract: Dana (2001) developed a model of price dispersion under demand uncertainty. The model predicts that, in the face of uncertain demand and inflexible prices, monopolists maximizes pro fits using ex ante price discrimination. We test the predictions of this model using a unique data set from Major League Baseball (MLB). Estimation of a two-way fixed effects model indicate that ticket price dispersion changes systematically with demand uncertainty in MLB, verifying the predictions of the model.

Keywords: price dispersion; demand uncertainty; sports (search for similar items in EconPapers)
JEL-codes: D42 L12 L83 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2010-12-07
New Economics Papers: this item is included in nep-com and nep-ind
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Journal Article: A test of monopoly price dispersion under demand uncertainty (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:albaec:2010_019

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