2 ms·
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
by 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 agoYep, 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 agoI 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 agoAgain 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.