Setting Prices for Tickets and Concessions

Each week the fantasy football teams play one another in head-to-head competition with one team hosting the "game" in their stadium. EconFantasy.com allows the home team to set prices for the event in their stadiums. In the simulation pricing decision can be changed from game to game so that the students experience the challenges that owners face in the off-season. Each section in the stadium has a distinct demand function, and students are not made aware of the specifics of this function (i.e. luxury boxes are certainly more price inelastic than the seats at the top of the stadium). The demand for seats in a section is not only a function of price, but of the past performance of the home and visiting teams, the "big name" stars on each team, and the population in the market. The results each week allow students to examine price elasticities and their relationship to an optimal pricing decision.

EconFantasy.com gives the commissioner access to the demand functions for each of the following four sections: lower field seating, middle mezzanine seating, upper "cheap" seats, and luxury boxes. The commissioner also may control the demand function for the four concessions: hot dogs, nachos, beer, and t-shirts.

The student franchise owners are not privy, of course, to the demand functions. As a topic in the Economics of Sports course, an instructor may ask students to estimate the demand functions by collecting attendance data from the league and generating an OLS regression. Students choose independent variables and attempt to determine the effects of these variables on attendance. The analysis will assist owners in determining their optimal prices to maximize attendance revenue and concession profits.