Price Discrimination and Baseball Tickets

Some Mets and Yankees fans are upset with how much ticket prices have been jacked up in the teams' new stadiums. The best seats in both the new Yankees Stadium and Citi Field will be about twice as expensive: From $1,000 a seat currently to $2,500 for the Yankees and from $276 to $495 for the Mets.

But you can't really blame the owners for charging as much as fans will pay. Baseball, after all, is not one of life's necessities even though sometimes it might feel like it is. In fact, some recent work by Wharton economists suggests another way baseball franchises could increase revenues. Running numbers on a survey conducted by a team in Japan's Nippon Professional Baseball league, Senthil Veeraraghavan and Ramnath Vaidyanathan discovered an interesting relationship between where fans sat and how much they valued their seats.

It turns out that fans who sat on the third-base side of the field reported higher seat values (after subtracting the real cost of the ticket) than those sitting in similarly priced seats on the first-base side.

One reason for this apparent paradox could be related to the home team's dugout location. The survey was conducted at a ballpark that had the home team's dugout on the first-base side of the field. Theoretically this allows fans sitting on the opposite side to view their favorite athletes. Another -- and I think likelier -- reason is that since there are many more right-handed players than left-handed ones, more of the action happens on the third-base and left-field side of the park. A better opportunity to grab a foul ball, for example, might increase how a fan values his or her seat.

There are a couple of caveats with the study though. First, the survey it's based on was conducted at only one game and something unique may have happened that could've changed how fans valued their seats. (Though Veeraraghavan and Vaidyanathan report fans who said they regularly came to games where much closer in their valuations than first-time attendees.) Second, if there is a dugout effect, then stadiums that have dugouts on the third-base side will offset some of the extra value third-base-sitting fans will attach to their seats.

If the results are similar in American baseball, it seems that teams can do two things in order to ensure that fans sitting in similar seats get the same amount of enjoyment: either lower ticket prices on one side of the field or raise them on the other side. Wonder which one sounds more attractive?

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