Monday, June 15, 2009

Ticket Prices and the Boss

Back when I was first teaching, some of my students were enamored with a singer they only referred to as “the Boss.” After some time, I learned who they spoke of and came to appreciate why they spoke of him so highly. I even managed to get tickets to the “Born in the U.S.A.” tour when it was in Detroit (Pontiac Silverdome to be exact). But that's another story. However, as I’ve aged and as Bruce aged, our tastes diverged.

Come this morning, and I find a couple stories about the pricing and availability of concert tickets, and “the Boss” is the hook for both of them. The first was on (HT to Mark Perry at Carpe Diem). The second I found when I got to one of The Wall Street Journal’s blogs.

It seems that one of the reasons it’s hard to score the best seats at a concert is that the artists typically hold some back for “family and friends.” Also, other contacts in the business (producers, label execs, etc.) have access to tickets ahead of the crowd – professional courtesy we might call it. And let’s face it, it’s not unlike athletes getting tickets for family and friends for “big games.” I wouldn’t be surprised if it’s part of the compensation package for some artists or athletes or whatever. But a question occurred to me, and I’d like to hear your thoughts.

Is there much difference in what goes on with tickets in the entertainment/sports industry from some of the scandals we've learned of in the financial industry? To me, it’s similar to insider trading. Pulling a quantity of tickets from the pool is bound to affect the market price. And it seems to me it’s not unlike skimming the best off the top for people on the inside. That seems similar to a Ponzi scheme. I’d love to hear some other views. After all, I believe in markets, but I think markets need to be fair. I don't see a problem with paying top dollar for tickets if the tickets are fairly available. And scalping seems to be about finding the true price of the service. But keeping them from the market seems different. Is it just accruing extra value due to time utility? Or is it a lack of transparency? There are a lot of ways to go with this, I think.

By the way, there are a couple of interesting podcasts on scalping at the EconTalk website. This one links to a discussion between host Russ Roberts and Duke economist Mike Munger. This second one is Russ Roberts talking to a scalper, a merchandiser, and even the police about scalping. They're both good and they both help stir the water.

This post references the following Keystone Economic Principles:
8. Quantity and quality of available resources impact living standards.
9. Prices are determined by the market forces of supply and demand… and are constantly changing.

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