4 ms·

It's fairly simple to show that trading in concert tickets is Kaldor-Hicks improving given reasonable assumptions. I've made the argument in the past. In this

• Retric 9y ago
  You can't increase tickets for a popular event, but an optimal strategy will not sell out every ticket to every concert. Thus ticket resellers are a net loss of sales.
  • ikeboy 9y ago
    Ticket resellers only exist when the people selling the tickets directly price them below the market clearing price. Ticket resellers move tickets to people willing to pay more, which means they have a higher utility. If there were enough tickets for everyone that wanted to pay the set price there would be no room for profit for resellers. Oh and in general you can increase tickets by booking a larger place or doing whatever it is on multiple dates.
    • leereeves 9y ago
      Measuring utility of luxury goods by price is saying that rich people enjoy the concert more than poor people, which is clearly untrue. Rich people pay more not because the concert offers more utility but because the same number of dollars offers less utility.
      • ikeboy 9y ago
        Well, it's an extension of thinking people should be able to make voluntary transactions. If someone is willing to give up their ticket for $X and someone else is willing to buy the ticket for $X then it is a pareto improvement for them to trade, since they both get something they value more than what they have.
        • YeGoblynQueenne 9y ago
          As an extreme example of why market rationality is useless outside of academic debates, people who buy heroin are making a voluntary transaction - so it's a pareto improvement for them to trade their dosh for junk. That's assuming that "making a voluntary transaction" is really and uncontroversially a "pareto improvement". Personally, I have no idea what that means, but you can replace it with any term: If someone is willing to give up their ticket for $X and someone else is willing to buy the ticket for $X then it is a <gobbledegook gobledegook> for them to trade, since they both get something they value more than what they have. People who buy heroin are making a voluntary transaction so it's a <gobbledegook gobledegook> for them to trade their dosh for junk.
          • ikeboy 9y ago
            Heroin produces externalities, which is the economic justification for its regulation, and why voluntary trades involving it aren't always pareto improvements. You've made it clear you don't have any economic training, so I don't see the point in continuing this. You have all the terms you need to look it up if you want to learn, or just take some econ classes somewhere.
            • YeGoblynQueenne 9y ago
              You're sure you don't want to dumb the economic language down a bit for the poor untrained person, then? This is a forum for technologists, after all, not economists. But, if you don't, I'll just assume that what you say would be obviously wrong, had I "economic training" and you're just wrapping it up in misused technical language to obscure that fact. In my experience that's usually what's up when people introduce technical terms in everyday conversation outside academic fora, and where ordinary language is fully adequate to debate an issue.
    • monocasa 9y ago
      I've seen cases where the scalper bots bought all of the tickets, and re sold them for two to three times the list price. And then I get there to a show that's maybe between 50% and 60% of capacity that's been 'sold out' since quite literally 30 seconds after the tickets went on sale.
      • ikeboy 9y ago
        If scalpers are buying 40% of the tickets and not finding buyers they'll quickly go bankrupt. If they are finding buyers at the higher prices, that means the market clearing price is well above the list price, and scalping increases total surplus (again, by moving tickets towards those who value them more). If the ticket sellers are artificially reducing the cost then this is what will happen.
        • monocasa 9y ago
          They're buying all of the tickets, increasing them by more than double and only selling between 50% and 60% of them, so they still come out ahead.
          • FireBeyond 9y ago
            > more than double That's optimistic. Ben Folds at the Washington Center for Performing Arts, tickets from $15-29... After scalping bots? Cheapest ticket was $130.
          • ikeboy 9y ago
            Seems like nonoptimal behavior on their part - once they've sold all the marked up tickets they can, they should sell the rest for a smaller markup until they're out. And, it's also nonoptimal behavior on the events part, because they could increase total revenue by decreasing seats and increasing price.
            • monocasa 9y ago
              Or maybe maximum money changing hands isn't always the best proxy for maximum utility.
    • YeGoblynQueenne 9y ago
      In addition to what others have commented, that's just saying that the venues exploit the concert-goers anyway, so why not just join in and help yourself to some of the loot?
      • ikeboy 9y ago
        There's no exploitation, just market clearing prices. Or could you define exploitation?
        • deleted 9y ago
          [deleted]
        • YeGoblynQueenne 9y ago
          Why do I need to "define exploitation"? We're only discussing the behaviour of venues and ticket resellers. What you say the venues do and what the resellers do is exploitation and that should be enough for the purposes of the conversation.
          • ikeboy 9y ago
            The way I understand the term exploitation, neither the venues nor the resellers are exploiting anyone. So you must be using it in a different meaning, much like I've seen Marxists use the term to encompass all employers.
            • YeGoblynQueenne 9y ago
              I don't know any Marxist theory (it's economic theory, after all), but, maybe, Is there something wrong with the Marxist definition of exploitation?
              • ikeboy 9y ago
                Well my main complaint with how it's used in practice is that it carries a negative connotation, so if they successfully convince you that every corporation with employees is exploiting by definition then they have a moral argument against capitalism, an ought derived from an is.
    • Retric 9y ago
      You are ignoring transaction costs. If I get 20 tickets for 50$ sell 8 of them for 150$ then that's a net win for me and it may not be worth trying to then sell the final 2 tickets at the last minute. Both the band and fans may prefer selling out the concert at use a price that maximizes utilization. A scalper is trying to maximize returns and does not care about 'selling out' just maximizing profit while minimizing effort.
      • ikeboy 9y ago
        If 8 sold for $150 then there is surely a price between $50 and $150 that would sell at 20. $50 cannot be the market clearing price given reasonable assumptions about demand curves.
        • Retric 9y ago
          Yep, but just because they 'could' sell them does not mean it's worth the effort to actually sell them. Hell having a reputation as the guy that always has tickets may be worth regular lost sales. In the same way premium brands may sometimes destroy inventory vs offering discounts. EX: http://www.slate.com/blogs/xx_factor/2010/01/07/why_hm_destroys_unsold_clothes.html http://www.slate.com/blogs/xx_factor/2010/01/07/why_hm_destr.... Note the recommendations to use a textile recycler and zero recommendations to sell at a lower price. Remember models are fun, but the real world is complex and you need to model reality not play with math.
          • ikeboy 9y ago
            I am recommending the list price be raised, which would get rid of the need for resellers. The resellers are capturing some value from an inefficient system, and the system became efficient there would be no value left to add and therefore no resellers.
            • Retric 9y ago
              Again bands and resellers are making different optimizations. A percentage of people showing up will buy extra merchandise which increases revenue. This captures value from people willing to pay higher ticket prices. So, if the band picks a price to sell out our reseller can buy all tickets raise the price and not sell out for a net profit. Meanwhile the band makes less money and fewer fans get to see the show. Remember, in the current system both the venue and bands are maximizing their profit.