Illustrations of Price Discrimination in Baseball

Posted by D. Daniel Sokol

Daniel A. Rascher, University of San Francisco and Andrew D. Schwarz, OSKR, LLC provide Illustrations of Price Discrimination in Baseball.

ABSTRACT: Price discrimination of this nature, focused on differing degrees of quality, bundled goods, volume discounts, and other forms of second-degree price discrimination, is commonplace in MLB. Indeed, it is safe to say that every single MLB ticket is sold under some form of price discrimination. As teams grow increasingly sophisticated in their pricing strategies, price discrimination is becoming more precise, more wide-spread, and more profitable, while at the same time providing for more opportunities for more fans to find tickets at a price they are willing to pay. Unlike a baseball game, where one team must lose and one must win, price discrimination allows for win-win economic outcomes for teams and fans alike.