Northwestern’s men’s basketball program is launching a new ticket-pricing program that will better allocate limited tickets for the remaining home games of the season, according to an athletic department news release.
Purple Pricing will involve a version of “Dutch auction,” a system in which auctioned items are initially offered at a high price that is incrementally lowered until a bidder takes the lower price.
Beginning with NU’s matchup against Ohio State University on Feb. 28, fans can visit the athletic department’s ticket purchase page to find out the preliminary ticket price. Once buyers have secured their seats, they wait as the price reductions continue leading up to the game, ultimately being refunded the difference.
The Purple Pricing auctioning system is a project the men’s basketball program developed in conjunction with two NU economists, Weinberg economics Prof. Jeff Ely and Kellogg economics Prof. Sandeep Baliga.
Ely and Baliga explained in a video posted on the NU athletics department’s website how the new system will work for fans looking to purchase tickets at NU’s future home games.
In the video, Baliga talked about how Purple Pricing is somewhat similar to the dynamic pricing auctioning system used by the Chicago Cubs. He cited multiple issues with dynamic pricing, including the fact that prices can fluctuate throughout the auctioning, “causing confusion” for fans.
He also said that model causes buyers to “game the system” by holding out on buying tickets in an attempt to catch them at their lowest prices, creating the possibility that the game will sell out before they purchase their tickets.
“Dynamic pricing is unfair because different people pay different prices for essentially the same seats,” Baliga said in the video.
To avoid these issues, the Purple Pricing system exercises the “Purple Pledge,” in which bidders are refunded the difference between the price they originally paid for their tickets and the final asking price.
“That removes any incentive to wait around for the lowest price,” Baliga said in the video. “The actual price you pay will always be the lowest price you could have gotten by waiting.”
Ely explained that Purple Pricing simplifies ticket buying and eliminates the chance that fans who are waiting for lower prices will miss out on sold-out games.
In addition to the game against Ohio State, Purple Pricing will also be used for NU’s March 7 matchup against Penn State.
— Lauren Caruba
