Review of Industrial Organization

, Volume 37, Issue 3, pp 197–214

Short-Run Demand and Uncertainty of Outcome in Major League Baseball

Article

DOI: 10.1007/s11151-010-9267-3

Cite this article as:
Tainsky, S. & Winfree, J.A. Rev Ind Organ (2010) 37: 197. doi:10.1007/s11151-010-9267-3

Abstract

This article explores the importance of uncertainty in athletic contests. We use a probit model and Monte Carlo simulations to forecast game outcomes in Major League Baseball. Simulations are necessary to understand fully the preferences that consumers have towards uncertainty in sports. We use these simulations to estimate demand using attendance data for regular season games. Our findings show that when game, playoff, and consecutive season uncertainty measures are all included in estimating attendance for individual games, only the metrics that are related to the home team’s standing are significant. These metrics include the change in performance from the previous season and the importance of the game in qualifying for the playoffs.

Keywords

Competitive balance Major league baseball 

Copyright information

© Springer Science+Business Media, LLC. 2010

Authors and Affiliations

  1. 1.Department of Recreation, Sport and TourismUniversity of Illinois at Urbana-ChampaignChampaignUSA
  2. 2.Program in Sport ManagementUniversity of MichiganAnn ArborUSA