Tyler Cowen and Kevin Grier argue that when people are buying a sports experience, they let emotions get in the way, and end up making poor judgments. Their examples:
- A fan goes to StubHub to buy a ticket to a big basketball game and shells out $125 for the best seat she can afford. The logic here is understandable: More money seems like it should give you a better view of the action and a better fan experience. But in practice, the worst seats in the highest-priced section are often no better, or are even worse, than the best seats in the next lower-priced section. But the seller is not going to tell you that.
- When customers sign up for a gym, they’re typically given two options: an all-inclusive membership or pay-by-the-visit. Studies from economists Stefano DellaVigna and Ulrike Malmendier have shown that even though it would be cheaper for most customers to pay by the visit, they almost always choose the unlimited plan, losing (on average) $600 for their trouble. Gym owners do not advertise this proudly, nor do they usually encourage you to take the cheaper deal.
- A fan scans the upcoming schedule of his local (lousy) NBA team and has to pick an upcoming game — so naturally he goes for one featuring a star team or a star player. (Our editor-in-chief has been known to do exactly that when, say, the Thunder come into town to play the Clippers.) But more often than not, an unbalanced game results, one with little drama and that sees the star play only 27 minutes, much of it at half-speed. You expect a ticket agency to point that out before you shell out hundreds of dollars? Yeah. We thought not.
When I visit a new city and if there is a sports event that I can attend, I do my best to get tickets. I am surprised the authors purely focus on the experience of the game, when it’s so much more than that. It’s the walking to/from the event, interacting with the fans, trying out the food at the ballpark. Often, these other experiences more than compensate if one observes a lackluster game.