Seat Value in Stadiums and Theaters: An Empirical Investigation

Abstract

We study how the seat perceived by consumers, after attending an event in a theater/stadium, depends on the location of their seat relative to the stage/field. We develop a measure of perceived seat value, called Seat Value Index, and relate it to seat location characteristics and consumer characteristics. We apply our analysis to a proprietary dataset collected by a professional baseball franchise in Japan, from its customers during a weeknight game. Most surprisingly, we find that customers seated in symmetric seats on left and right fields might derive very different valuations from the game. Thus, commonly followed simple pricing mechanisms in baseball stadiums might be inefficient from a revenue perspective. Furthermore, customers perceive higher net valuations at distantly located upper deck seats and some outfield seats, possibly because of easy availability and low prices. We also find that the customers who have visited the baseball stadium more often experience lower variance in their valuations as compared to first time visitors. This implies that repeated visits to the ballpark in help customers learn the true value of a seat.Thus, our research quantifies the significant influence of the location of the seat and frequency of visits on the ex-post seat perceived by customers. Understanding the heterogeneity in seat values across different seat locations provides theaters and stadiums an opportunity to systematically adjust ticket prices based on customer seat perceptions.