Stealing First? Developing a Dynamic Pricing Strategy to Challenge a Rising Secondary Ticket Market

Abstract

The primary ticket market (Team ticket offices, team websites, Ticketmaster) and the secondary ticket market (StubHub, VividSeats) are the two main methods to acquire tickets to baseball games. Ticket revenues account for a significant portion of total Major League Baseball (MLB) team revenue, and for this reason, teams are interested in perfecting their pricing policies to maximize revenue. This paper will explore the supply and demand of the primary and secondary ticket markets and prices for an anonymous MLB team. Ticket sales data for both the 2015 and 2016 seasons is used to analyze the relationship between the two markets, model consumer demand for the primary markets, and develop a new dynamic pricing strategy for the team. The goal of this paper is to develop a pricing strategy that will help the team win back customers from the rising secondary ticket market.