Author

Misun Won

Date of Award

Spring 2021

Document Type

Open Access Dissertation

First Advisor

Stephen L. Shapiro

Abstract

There has been a recent price policy change in the sport industry that ticket resale companies attempted to reveal any additional fees upfront to increase price transparency and protect consumers in the marketplace. This policy change was announced in early 2020 (Thompson, 2020). However, as the coronavirus outbreak affected live events to be canceled, become virtual, or have a limited facility capacity (Apstein, 2020; Perry, 2020), it disabled the resale companies to see consumer responses to their policy change that may increase or decrease ticket revenues. In addition, charging additional fees to the ticket face value is a form of partitioned pricing and drip pricing, which contains two price components: a base price and surcharges (Burman & Biswas, 2007; Morwitz et al., 1998). This means that purchase decisions may vary depending on whether the base price or the total cost of tickets is below (or above) the price range individuals consider acceptable. This makes an examination of price acceptability within partitioned pricing and drip pricing imperative in terms of understanding consumer purchase decisions. Therefore, this particular study aimed to disclose consumer perceptions (i.e., surcharge sensitivity, surcharge acceptability, surcharge skepticism) and purchase behaviors (i.e., search intention, purchase intention) regarding surcharge transparency. An experimental between-participants design with four groups (no fees vs. transparent fees vs. a notification of fees vs. hidden fees) was used to manipulate surcharge transparency that is currently employed on the secondary market by various companies. An online survey was developed on Qualtrics, and data from a total of 547 participants was collected on Amazon Mechanical Turk. The author employed four multivariate analyses of covariances for data analysis. This study found that, first, when ticket prices are below individuals’ acceptable price, they have high intention to purchase the ticket. The opposing result occurred when ticket prices exceed individuals’ threshold. However, consumers consistently have high search intention regardless of price acceptability. Second, due to sport consumers’ acknowledgment that additional surcharges are added to ticket prices when purchasing them on the secondary market, the way surcharges are presented does not vary their surcharge perceptions. Rather, the size of surcharges (e.g., $2.50 vs. 25% of the base price) differs surcharge perceptions. The acknowledgement of estimated fees on the secondary market makes the effects of surcharge transparency insignificant on purchase behavior as well as the moderating impacts of surcharge perceptions. This study makes contributions to the PP literature and the sport consumer behavior literature. The findings contribute to providing a comprehensive understanding of consumer behavior with two common surcharges in live ticket purchases. This study particularly advances the literature with fundamental moderators (e.g., price acceptability, surcharge transparency) and essential outcome variables (e.g., search intention, purchase intention) within the context of sports. In addition, the present study is guided by attribution theory (Heider, 1958; Kelley & Michela, 1980); i.e., sport consumers acknowledge that surcharges exist in order to provide the ticketing service for consumers and to generate revenues for organizations. This attribution neutralizes the effects of PP on the secondary market. From the managerial standpoint, the findings of this study provide resale companies with effective price presentation styles. In order to enhance sales revenue, companies are recommended to employ all-inclusive pricing (no price breakdowns). However, companies should ensure they clearly communicate any fees that are included in the total price in order to increase price transparency.

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