How Event Significance,Team Quality,and School Proximity Affect Secondary Market Behavior at March Madness

Abstract

Though most academic research on sports pricing finds that sports organizations price their tickets in the inelastic region of consumer demand, most events do not consist of several micro-events contested in different locations where the event participants are not known until days before the event occurs. The Division I Men's College Basketball tournament offers a contrast to most sporting events because there are several micro-events occurring at different sites, and there is greater uncertainty regarding event quality because participating teams are unknown until just days before each event. Using a sample of 2,160 tickets purchased on the secondary market for the 2013 tournament, it is concluded that (1) the NCAA does not price all of their March Madness micro-events in the inelastic range of demand, and (2) secondary market behavior is significantly influenced by perceptions of event significance and the attractiveness of an event's draw, the latter of which being influenced by consumers’ perceptions of the quality of participating teams and the proximity of participating schools from the host site of their competition.