Wednesday, August 15, 2007

According to Wikipedia I Cause High Ticket Prices

Before a baseball rant. One cool link about Wikipedia manipulation . Lots of interesting instances of organizations manipulating their page. Including someone who works for MLB and changes Bud Selig profile from former used car salesman to worker in his father’s car sales company.

It has been a good year for my own personal attendance at Major League baseball games (about 10 Nationals games, 3 Orioles, 3 Brewers, and 1 Dodger game). Now often people complain about the high cost of attending games. Granted my opinion may be a bit biased, I’m a huge baseball fan and an economist. There are plenty of deals to be had at major league ball parks. Granted if your favorite team is the Red Sox or Yankees your less likely to find deals. I have been to several Nationals games for only $5. Several teams have promotions. Like for $15 in Baltimore on Thursday nights you get a seat and a Boog Powell BBQ sandwich. In Milwaukee you can get free tickets by filling your tank at BP. Even when my wife and I wanted to go Dodger Stadium on father’s day against their inter-league rival the Angles, I found tickets for $25 on Ebay. Now for the economist part. I have often heard complaints about how players’ salaries are the cause of the high ticket prices. I do not believe this is the case for the most part. In essence each major league franchise acts as a seller of entertainment in monopolistic competition. (Unless you are lucky like me) there is probably only one major league ball park you can go to regularly, so in that way each team has a monopoly on the local major league baseball market. But if ticket prices or concessions are too high I could choose other entertainment options (movies, concerts, and minor league baseball). The owners will choose ticket prices that maximize their profit (or close to it with a few charity tickets). As each additional (or several) people come to the game the stadium might have to hire more peanut vendors, ushers, and parking lot help. However, no matter how many people come to the game the players are paid the same, their cost does not change. To maximize profit the owner must choose the best ticket price given the costs that change when more people come.

Now an interesting aside. As I mentioned Nationals, Brewers, and Orioles tickets are cheap. Red Sox and Yankee tickets are more expensive. The first set of teams have not been playing well over the last decade, the second has. Generally as teams do better they get more fans and they raise ticket prices. One way to make your team better as an owner is to pay for free agents. So in that way by making your team better by spending money you increase demand and prices.

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