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Market-Based Solutions to Vital Economic Issues
Research
May 1, 2015

Consumer Forwards: Concept and Empirical Analysis of a Sports Ticket Market

Abstract

Tickets to sports events like the NCAA basketball tournament are currently sold well in advance of the games. Fans who wait to purchase a ticket after knowing which teams will play are often disappointed because the tickets are sold out by then. Recently, some firms have offered fans the opportunity to purchase forwards on tickets before this uncertainty is resolved. Each purchased forward is linked to a team – if that team makes it, the fan must buy the ticket; otherwise, the forward expires. Such forwards protect fans from uncertainty and provide the firm with assured revenues. This paper presents an analysis of data from a company that offers forwards in a sports ticket market. Multiple models that account for fan heterogeneity are presented to capture forward purchase and resale behaviors. The analysis and findings shed light on how fans mitigate risk in this volatile setting and lay a foundation for future work on consumer forwards.

Citation

Sainam, P., Balasubramanian, S., & Bayus, B. (2015). Consumer forwards: Concept and empirical analysis of a sports ticket market. International Journal of Sport Finance, 10(2), 103-121.


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