The new Dallas Cowboys Stadium got me thinking: At a football stadium where some fans live nearby and others travel great distances to attend, where would you expect to find a higher percentage of long-distance travelers: in the cheap seats or in the expensive seats? Why?
Monday, September 21, 2009
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Assuming that a more expensive seat grants more benefit, you would expect to find a higher percentage of long-distance travelers in the expensive seats. Using marginal analysis, marginal cost must be equal to or less than the marginal benefit. The marginal benefit would be greater in the expensive seats because you would get more enjoyment being closer to the field. One would have you make the game worth the trip. Since better seats give one a better experience at a football game, the benefit would be increased and the cost of the travel would be less than that benefit.
If the benefit is the same for each type of seat, more people would buy the cheap tickets because the cost would not be as high and the benefit would be the same. Thus, the marginal benefit would be greater than the marginal cost.
Blakely Dye
Blakely, are you suggesting that the MB of the expensive seats for the long-distance travelers is greater than the MB of the local fans? Why would that be the case?
No, I would argue that the marginal benefit would be the same for both local and long-distance fans. However, the MC for local fans is less than the MC for long-distance fans.
Assuming that the MB of the expensive seats (for either local or long-distance fans)is higher than the MB of the cheap seats (again for either type of fan), than you would expect to see more long-distance fans in the expensive seats based on the concept that MC must be less than or equal to MB.
Blakely Dye
I would believe marginal benefit would be higher for long distance fans. Seats in general are a rarity to these long distance fans, they may only get to see one game a year. as for the local fan, they could walk to the stadium and pick up a ticket any given sunday (or monday). For the long dinstancers, this is a trip, an expiriance that is not easy to come by. Even for cheap seats thier marginal benefit is higher than the local fan. but for the long distance fans, the marginal benefit is so high that it outweighs the rediculous cost of the good tickets (and gas and food and lodging). So, as these tickets are rare for long distance fans, thier marginal benefit of this one game would be higher than the local fan and the lond distancer would be willing to pay more for tickets. So you would be seeing more out of towners in the expensive seats.
Jake, I'm still not convinced that the MB is higher for more distant fans. Is there a difference in income levels between local and distant fans? Nobody has yet to consider the other side of the ticket purchase decision in their answer. (What is the other side of the decision?)
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