Sunday, October 21, 2018

Hotelling in Death Valley

      This weekend, I ventured into the absolutely insane world of the tailgating scene of Louisiana State University to visit some friends during their Homecoming Weekend. This unbelievable scene, affectionately referred to as "Death Valley", has recently seen major changes as the university has cracked down on the locations of fraternity tailgates.
       Now that individual fraternities are unable to host tailgate festivities within their own houses or inside the perimeter of the actual stadium, there is a mad dash for fraternities to capture the optimal tailgate plot that can capture the biggest share of the tailgate-goer market. The plots right outside the stadium sit right in the middle of the consumer market, with LSU student apartments to the east and LSU dormitories to the west. Right in the heart of Death Valley, Hotelling's law seen in "Stability in Competition" holds true in that the different fraternities "selling" mostly homogenous products (alcohol and music) end up moving closer and closer to the plots just outside the entrance of the stadium, so that they may capture more college students "consuming" their fraternity's tailgate experience.
       However, due to the conglomeration of fraternity tents side by side to one another and the lack of differentiation between products, consumers on their way to the football game freely flow through what seems like a mere block-long tailgate. This causes the plot directly closest to the stadium to be the optimal location, thus capturing the biggest amount of tailgate-goers and therefore achieving the coveted tailgate "buzz".


1 comment:

Unknown said...

This is a great application of what I think to be a fascinating theory. I would like to extend the discussion by pointing out that this principle is for firms maximizing sales, which ideally would be infinite. This example assumes then that the ideal tailgate would have all LSU fans in attendance. This of course would not allow anyone there to enjoy the food, drinks, or music without being pushed around or "crowded out" by other fans. So, perhaps the ideal location is not closest to the middle in this case by rather somewhere on the periphery of the "block". Hope the trip was good, Go Tigers!