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Dynamic pricing for single game tickets is an increasingly common strategy used by sports teams to increase revenue and reduce the arbitrage opportunities available to ticket resellers. However, current methods of dynamic pricing forgo significant amounts of revenue when highly anticipated tickets are initially released to the public for sale. For example, when prices are increased dynamically in response to exuberant early demand, the full potential of this early demand is not captured and revenue is lost. To solve this problem, Stanford successfully implemented a system for its highly anticipated football games called Predictable Dynamic Pricing, whereby ticket prices are initially set far above the projected clearing price and subsequently decreased over time according to a transparent and pre-announced (i.e., “predictable”) schedule.
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