Sport tickets pricing strategy with home team's crowd effect

Abstract

This paper investigates the impact of the crowd effect and financing constraints on pricing strategy by constructing an intertemporal model and introducing the crowd effect into a monopolistic home team's decision-making framework. The results demonstrate that a stronger crowd effect and a larger depreciation rate are always beneficial to the expected profits of the home team and the home team may price along the inelastic portion of the static demand curve in periods 1–3, as long as the expected deferred marginal revenue and the additive price from the performance of the preceding match are sufficiently large.