Monday, February 15, 2010

The Early Bird Gets the Cubs Tickets ... For an Added Fee

CC photo from MACSURAK on Flickr.

From the New York Times:
But the Cubs are adding a twist this year. On Monday, fans will be able to buy tickets to every Cubs home game, but at a premium of 20 percent over the face value, or 15 percent if they pay with a MasterCard. The MasterCard First Chance Presale will last until Thursday and include an undisclosed percentage of the pool of the Cubs’ single-game tickets.
On Friday, any remaining tickets will be sold at face value (with the usual assortment of fees).
Although the story suggests that some fans may see this as a "stealth hike in ticket prices," it's probably a good move for the Cubs and their fans alike.

When a firm can sell a variety of products of various qualities and flavors at various prices to various people, this provides depth to the market. For example, we are better off as consumers because there are many types of bread in the store. You can pay more and get name brand. You can pay less and get day-old bread. You can buy whole wheat, sourdough, and countless others. No one complains that better or more exotic bread carries a higher price tag.

Similarly, we can treat the early-bird Cubs ticket as a different "good" than the other tickets. The right to be first in line can be very valuable, as I discussed in an earlier post about boarding on Southwest Airlines.

Every year, the demand for tickets far exceeds the supply (at least at current prices), and the premiums that fans pay above face value end up in the pockets of scalpers. Instead, if the more anxious fans can pay a premium for first dibs, at least the extra money goes to the Cubs (and possibly toward player payroll), and not to the scalpers.