Monday, October 11, 2010: 4:00 PM
Standing at the heart of orthodox economics, price is regarded as the most crucial factor governing the practice and efficiency of any market. To a large extent, it is a primary factor which functions as a common denominator for the measurement of various economic variables such as output, income, and productivity, etc., hence facilitating modern economic studies. Nevertheless, traditional price theory and related literatures will be to critical review when being applied to the studies of casino gaming – a rapidly growing global industry over the past 2 decades which provides a unique form of leisure/entertainment service.
Different from any other economic commodities, the theoretical prices of casino games are largely opaque to the consumers, nor those prices charged to individual patrons in their limited number of visit to casinos for enjoying the gaming services. In principle, once determined, theoretical prices of casino games are seldom changed as a response to changes in demand and costs of business. Owing to the invariant nature of prices of casino games, other associated issues include measurement of the relationship between price and demand and supply, as well as the real output from the casino industry.
Despite that a wide range of academic studies have been recently conducted on the business of casino gaming, encompassing social and economic impacts, economic analysis of the prices of casino games is still found absent in the related literature. By examining the business nature and organization of casino gaming, and its unique features in practice, this paper is aimed to explore the economic role of the theoretical price in this particular industry, and suggest an alternative approach to measure the nominal and real prices of the gaming services, which could be more indicative to changes in both demand and supply over time.
In view of the lack of related studies in this topic, this paper will firstly conceptualize the nature of casino game price and its economic role in the market, including its functions in supply, demand and industrial organization. Constructing on this ground, the relationship between theoretical, nominal and real prices of casino games will be examined. Based on the practice of casino gaming, it would then argue that the “average price” of a game charged to casino patrons (or a “typical casino game consumer”) is the combined result of minimum bet as listed for a game and its theoretical price, as opposed to solely determined by the latter. Indeed, this alternative approach of measuring the casino game price will allow economists to gain more insight into their studies of casino gaming, and provide policy makers with valuable reference to construct related price indices for facilitating policy making and academic researches of this expanding global industry.
Different from any other economic commodities, the theoretical prices of casino games are largely opaque to the consumers, nor those prices charged to individual patrons in their limited number of visit to casinos for enjoying the gaming services. In principle, once determined, theoretical prices of casino games are seldom changed as a response to changes in demand and costs of business. Owing to the invariant nature of prices of casino games, other associated issues include measurement of the relationship between price and demand and supply, as well as the real output from the casino industry.
Despite that a wide range of academic studies have been recently conducted on the business of casino gaming, encompassing social and economic impacts, economic analysis of the prices of casino games is still found absent in the related literature. By examining the business nature and organization of casino gaming, and its unique features in practice, this paper is aimed to explore the economic role of the theoretical price in this particular industry, and suggest an alternative approach to measure the nominal and real prices of the gaming services, which could be more indicative to changes in both demand and supply over time.
In view of the lack of related studies in this topic, this paper will firstly conceptualize the nature of casino game price and its economic role in the market, including its functions in supply, demand and industrial organization. Constructing on this ground, the relationship between theoretical, nominal and real prices of casino games will be examined. Based on the practice of casino gaming, it would then argue that the “average price” of a game charged to casino patrons (or a “typical casino game consumer”) is the combined result of minimum bet as listed for a game and its theoretical price, as opposed to solely determined by the latter. Indeed, this alternative approach of measuring the casino game price will allow economists to gain more insight into their studies of casino gaming, and provide policy makers with valuable reference to construct related price indices for facilitating policy making and academic researches of this expanding global industry.