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MULTIPRODUCT PRICING IN MAJOR LEAGUE BASEBALL: A PRINCIPAL COMPONENTS ANALYSIS
Author(s) -
DEPKEN CRAIG A.,
GRANT DARREN
Publication year - 2011
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.2010.00263.x
Subject(s) - economics , league , microeconomics , variation (astronomy) , econometrics , price discrimination , ticket , principal (computer security) , computer science , physics , computer security , astronomy , astrophysics , operating system
The empirical analysis of multiproduct pricing lacks clear theoretical guidance and appropriate data, which often render traditional regression‐based analyses impractical. Under these circumstances the factors underlying price variation can be inferred using a new methodology based on principal components. Analyzing ticket, parking, and concession pricing in Major League Baseball with this methodology demonstrates that general demand shifts are the primary factor, but explain only half of overall price variation. Also important are price interactions deriving from demand interrelationships between goods and attempts to maximize the capture of consumer surplus in the presence of heterogeneous demand. ( JEL D40, L11, L13)