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| Source: http://www.makingtimeformommy.com |
The economic principle I’m exploring is people generally respond to incentives in predictable ways
My research question to help me study the economic principle is what incentives do MLB franchises do to get people to go to games?
The article published in Bleacher Report titled “MLB: 10 Easy Ways To Increase Attendance”, by Chris Schad, demonstrates this economic principle because it shows how decreasing the expense of attending MLB games can increase attendance.
First, MLB teams are starting to adapt to ticket pricing. This only applies to certain teams as larger market teams who regularly make the postseason has price proportions that are not similar to most of the league. Teams like the New York Yankees and Chicago Cubs can charge whatever they like for tickets because there is high demand for a team who is good all the time. Small market teams such as the Chicago White Sox, Toronto Blue Jays, and Tampa Bay Rays are finding creative pricing incentives to get people to go to games. Each one of these teams are lowering pricing of their tickets just to get people to go to games. If the price of tickets goes down more people are incentivised to go to games. These small market teams rely on people spending more on food and souvenirs at games and people can do this if the ticket prices are lower.
Second, if we go into depth of ticket pricing and how much value you get out of your ticket we can see clear trends of increasing attendance. The Chicago White Sox every Sunday (at home games) has a promotion called family sundays. Every Sunday ticket pricing drops and people can buy tickets as low as 5$. Along with this deal kids are allowed to run the bases after the game, which is a added experience which incentives more families to go. The majority fanbase also benefits from this because they also get the same seating for the same low price. If the prices are lower more people will go to the games.
Third, basic economics shows that decreasing the price of anything creates more demand. The demand curve shows as price falls then the quantity of the demand grows larger. If MLB teams really want to increase their attendance it would only make sense for them to decrease the expenses of attending games as a whole (while still being profitable). Certain teams take advantage of this principle and other teams don’t have too due to constant high attendance.
In my next blog post I will research: Can creating more advanced MLB stadium boost attendance?
I think it is interesting that the prices for tickets can go as low as 5 dollars. I would suggest that you look at other sports and compare their marketing tactics.
ReplyDeleteIt's interesting how teams are constantly adapting their ticket prices in creative ways to ensure that they are making as much revenue as they can.
ReplyDelete