Question

Does a regulatory institution need to be in place to control sports leagues (think about issues such as "deflate gate," concussions, for example)?

Is it fair to charge different sports consumers different prices to see the same game/match? Think about segmented markets, two-part pricing, or quantity discounts, for example. Who benefits? Who loses?

Answer 1

Sports is one such thing which could be prone to corruption if there are no institutions to monitor it. For instance, there is a lot of betting that people indulge in to make profits which has in many cases led to match fixing. This is why there is a need for regulatory institutions to ensure that the sports leagues are monitored and there are no malpractices. For instance is the incident of deflategate which was a big controversy. If institutions were there to regulate the sport events, it would also ensure that big teams would not marginalise the small ones.

It is definitely fair to segment the markets. Through price discrimination, sellers can segment the markets and charge different prices to different users on the same good. It will help increase the revenue that the sellers (stadium owners). It is fair because usually prices charged are different based on the location of the seats in the stadium. This means that those who want a better view of the game would be charged more because they can gain a higher utility by watching their favorite sport closely. This way the owners or the sellers benefit. But the buyers who cannot afford to pay high prices for seats of their desire lose as they will have to buy the seats which do not give a clear view of the game.The same goes about quantity discounts as well because to avail these discounts, individuals have to buy many tickets which is usually not possible for those who have limited income. This way they cannot avail low prices.