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The law of one price?
Jason Kottke informs us:
Ticket prices at the new Yankee Stadium are so high that if a New Yorker wants to watch a Mariners/Yankees game from the best seats, it would be a lot cheaper to fly to Seattle, stay in a nice hotel, eat fancy dinners, and see two games.
Was it not Mises who said that the purchasing power of money is the same everywhere? Some of the price differential will come from the greater value of the business connection in New York. And maybe those seats are really good.
Elsewhere from kottke.org, here is a post on breeding rats to be better stock traders.
Posted by Tyler Cowen on May 12, 2009 at 11:13 AM in Sports | Permalink
Comments
Well as for the rats, since people like Cramer do not beat the averages, I am sure they will do fine.
Posted by: Floccina at May 12, 2009 11:39:04 AM
Price differential is also influenced by the ignorance of the customers: how many people are aware of the fact that it's cheaper to go to Seattle than to the Yankee Stadium?
Posted by: MacOSY at May 12, 2009 11:42:00 AM
Rothbard would have pointed out that they are not the same goods (services), so therefore might well have different prices.
Who wants to see the jankees anyway?
Posted by: AADL at May 12, 2009 11:44:45 AM
I don't know about Seattle, but, if you watch when the Yanks play the Orioles, it is clear that a lot of fans do travel down to Baltimore for those games. Note also that, if your time is valuable, it might be better to pay the extra money to see games in New York.
Posted by: y81 at May 12, 2009 12:08:59 PM
Maybe there is value in having the seats around you empty?
Posted by: Andy at May 12, 2009 12:18:46 PM
1. Not identical goods. Seattle versus NYC.
2. Total time not equal.
Yankee game -- 2 hours round trip travel plus 4 hour game.
Mariners game -- 13 hour round trip flight plus travel to and from game plus 4 hour game, plus overnight stay
Opportunity cost offsets gain from doing it.
Posted by: Milton Recht at May 12, 2009 12:19:09 PM
Wouldn't it be more correct to say that the purchasing power of equilibrium prices are the same everywhere? Are the Yankees prices in equilibrium?
Posted by: Neal at May 12, 2009 12:25:59 PM
Isn't part of the price of seeing the Yankees in Yankee Stadium, the ability to brag later and wax lyrical about the experience?
The future stories you tell have greater value, to yourself and others, if they occur in the actual Yankee Stadium.
If it was just about getting the best view of the game, then we'd all watch it on TV.
Posted by: jim at May 12, 2009 12:32:36 PM
Seriously. Different goods. They aren't good substitutes. I'm somewhat new around here, but do you totally reject the notion of subjective valuation?
Posted by: Matthew at May 12, 2009 12:51:24 PM
Between the question mark in the title and the Mises line, I think Tyler agrees with what the commenters are saying. Some of his posts become clearer with deep textual analysis.
Posted by: Greg at May 12, 2009 1:12:56 PM
The Yankees suck.
Posted by: Yancey Ward at May 12, 2009 1:56:23 PM
I don't have specific data for New York City per se, but since a net total
of 1.576 million people left the Empire State for other states between 2000
and 2008, and a net total of 439,000 people left New Jersey during the same
period, I would say that, contra Mises, New York is priced above what
people want to pay for the indubitable cachet of living and doing business there.
Meanwhile, a net total of 199,000 people moved to Washington State --
suggesting that, in recent years, at least, it's been underpriced.
Posted by: Stan Greer at May 12, 2009 2:57:25 PM
More spot-on commentary, courtesy of The Onion:
http://www.theonion.com/content/news/slashed_ticket_prices_allow_lesser
Posted by: Jonas at May 12, 2009 3:55:00 PM
Its time = money. Many Yankees fans in fact do go to Baltimore to watch the team play. But a trip to Baltimore basically means committing an entire day to see a baseball game, instead of an afternoon or an evening.
And the Seattle example is ridiculous. Any value in seeing the baseball game is wiped out by having to deal with the US air travel system. In fact with flight delays there is no guarantee that you will get to the game in time.
The New York area is overpriced, but the "market" on where you live is not exactly liquid. People are tied to areas by job and family obligations. Nor can you buy a house or lease an apartment over the internet.
Posted by: Ed at May 12, 2009 5:09:13 PM
There is no normal way to see a Mariners /Yankees game in Seattle
Posted by: k at May 12, 2009 6:11:52 PM
I know it was true at one time, and may still be, that the subsidy on certain Amtrak routes was so great that it would have been cheaper to give each passenger a first class plane ticket and shut the route down.
Posted by: Bruce Bartlett at May 12, 2009 6:20:15 PM
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Posted by: air jordan shoes at May 12, 2009 9:15:05 PM
I know it was true at one time, and may still be, that the subsidy on certain Amtrak routes was so great that it would have been cheaper to give each passenger a first class plane ticket and shut the route down.
Several years ago the then-Governor of Connecticut, John Rowland, was able to demonstrate quite convincingly that the state subsidy for Metro-North Railroad's Waterbury branch (which runs about 30 miles from Waterbury to the New Haven mainline) was greater than the cost of providing each rider with a free ride in a stretch limousine.
Posted by: Peter at May 12, 2009 10:00:03 PM
The comments just go to show that economists can't take a joke.
Posted by: G-Fin at May 13, 2009 9:48:58 AM
Better question, given the insanely overpriced nature of tickets for the new Yankees stadium, what does the scalper market look like for tickets? Are they buying tickets in hopes of selling them at a profit?
Posted by: Steve at May 13, 2009 7:32:34 PM
I will have to be the first to admit that I know very little about baseball. I love sports but watch baseball very little. One thing I would like to ask though is if this price has anything to do with fewer fans wanting to watch? This would follow the basic law of demand. Less fans willing to watch the team so prices must go up. This could be explained because people may be tired of watching this team pump the most money of any team into there players and getting the least results of any team. "Never has so little been done with so much."
The next explanation could be that these tickets have just been suffering from the bad economy. If the tickets are a normal good then with lower wages people will revert to buying its substitute or a inferior good. Maybe people will just be watching the Yankees lose from their living rooms.
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Any value in seeing the baseball game is wiped out by having to deal with the US air travel system. In fact with flight delays there is no guarantee that you will get to the game in time.beagle dog beagle training ladybug baby shower
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