Abstract

Inelastic pricing of sports tickets, an outcome routinely demonstrated in empirical studies, cannot be explained by the conventional hypothesis of pricing under monopoly. In this paper, we incorporate the notion of home-city corporate social responsibility (CSR) as a business strategy into a sports team’s objective in that the team cares not only about team profit, but also about the benefit of its fans/consumers. Such consideration may engender long run fan loyalty, as well as improve prospects for public stadium financing. We show that inelastic sports ticket pricing arises when the weight that a CSR team attributes to fan/consumer surplus is sufficiently large.  Our analysis helps identify the condition under which inelastic sports ticket pricing is consistent with a home-city CSR strategy.         

 

Keywords: sports ticket pricing, inelastic sports ticket pricing puzzle, corporate social responsibility, firm optimization

How to Cite:

Chang, Y. & Sanders, S., (2022) “Inelastic Ticket Pricing Puzzle and Home-City Corporate Social Responsibility as a Business Strategy in the Sports Industry: A Firm Optimization Approach”, Maths and Sports 3(1).

Rights: Mathematics and Sports