5 ms·

Yeah I always find it interesting that statements like that ("scalpers hurt literally everyone") can just be made and treated as gospel by most people. Not only

Yeah I always find it interesting that statements like that ("scalpers hurt literally everyone") can just be made and treated as gospel by most people. Not only is the statement not self-evident, but to your point, just a small amount of thought on the issue makes it obvious what the value is. People love to get mad at a scapegoat rather than a root cause. So you blame the scalper rather than realizing that the concert you bought the ticket for set their prices way too low - perhaps because selling at the "true" price (somewhere between the sticker value and the scalped value) - would generate negative goodwill, or it would give the perception that an event (say Coachella as the classic example) is only "for rich people". The irony is of course that selling at an artificially low price doesn't suddenly make it not for rich people, it just adds a small random chance that you'll be able to convert your own time sitting there refreshing the website across many browsers into a cheaper-than-it-should-be ticket. But functionally the vast majority of people end up buying from scalpers or at least at a slightly above sticker price. There's a related discussion about so-called "price gouging". IMO it's the classic scalper argument but just in a different form. Price gouging laws are not just immoral but are actively ineffective at their stated purpose; they just lead to the hypothetical price-gouge transaction never occurring. If you drive across state lines to bring HAM radios or water filters or what-have-you during hurricane katrina, and try to sell at above market rate, you'll be tossed in jail and your goods will be seized by the police, rather than making it out to the people who actually need them and are willing to pay 2x or 3x the usual price. TL;DR: We've all got these twisted beliefs about how pricing works or the law of supply and demand, an illusion supported by the fact that our respective societies are so technologically/economically advanced that we can have massive supermarkets where you buy commoditized items that you can get at reasonably similar prices anywhere. Whereas if you go back in history to a pre-industrial time, a form of pseudo-bartering was the default and there was not this idea of a commodity, but rather every transaction, every buyer:seller relationship etc was a unique and non-commoditized interaction and thus it wouldn't seem weird to have different prices for different people or different prices at different points in time, etc.

andechs 5y ago
> moral but are actively ineffective at their stated purpose; they just lead to the hypothetical price-gouge transaction never occurring. If you drive across state lines to bring HAM radios or water filters or what-have-you during hurricane katrina, and try to sell at above market rate, you'll be tossed in jail and your goods will be seized by the police, rather than making it out to the people who actually need them and are willing to pay 2x or 3x the usual price. The reason is they don't want private individuals entering danger zones just to make a buck - a profiteer could easily end up a victim from the dangerous situation.
- jtbayly 5y ago
  So now emergency workers aren’t allowed to be paid. Congrats.
  - Fuzzwah 5y ago
    What? "emergency workers" are not "private individuals".
    - jtbayly 5y ago
      The reasoning against private citizens was that taking risk to make money was inappropriate. That applies equally to emergency workers. And by the way, many workers during emergencies are just private citizens.
lazide 5y ago
Do you have any data on that ‘majority of people buy from scalpers’ claim? One reason for anti price gouging laws is that it is not uncommon for people to buy out all supply, then turn around and charge more/sit on a stockpile to solve the artificially created shortage they themselves created - a term for that being ‘cornering the market’. I haven’t generally seen too much anger at someone legitimately opening up supply by importing more or opening up more supply lines (especially if they say that’s what they’re doing). People have been pretty open to paying more in that case (albeit maybe not 10x more, though that is more because it’s hard to plausibly have such an increase in cost without literally airdropping supplies - which is a different beast).
- selectodude 5y ago
  There’s no shortage of people who tried to pull that and ended up with tens of thousands of dollars worth of toilet paper and hand sanitizer last year. If there’s not an actual shortage, merely a demand shock, trying to corner a market will not go well for you.
  - lazide 5y ago
    And many more that made millions. The ones that get caught get penalized in public/shamed, but there are many more that were not - I personally saw many amazon sellers doing it for months without any apparently penalty.
Dylan16807 5y ago
> The irony is of course that selling at an artificially low price doesn't suddenly make it not for rich people, it just adds a small random chance that you'll be able to convert your own time sitting there refreshing the website across many browsers into a cheaper-than-it-should-be ticket. That depends on the level of demand and how low the price is. It's pretty easy to have a situation where the number of tickets available is higher than the number of people that would have bought tickets for themselves on day one, but you hit immediate shortages when scalpers are also buying. In a situation like that, scalpers are doing almost all harm. They add liquidity to a situation that already had enough liquidity, and extract tons of money in exchange. > If you drive across state lines to bring HAM radios or water filters or what-have-you during hurricane katrina That's the positive case. The negative case is someone buying it and putting it in their garage, or a store vastly increasing the price on something people need and they already had. If you're trying to get paid for your labor, like driving essential supplies around, I would not call that gouging in the first place.
- kbenson 5y ago
  > It's pretty easy to have a situation where the number of tickets available is higher than the number of people that would have bought tickets for themselves on day one, but you hit immediate shortages when scalpers are also buying. But the total number of people buying tickets is the same, all that's happen is it's being temporally shifted for the gain of the people that can afford to do so. This only works because the actual offered price of the tickets if far below that real cost people are willing to pay. If tickets were initially offered at an accurate price, there would be no money to be made buying them for resale (well, almost. There's still the option for artist demand to change over time with popularity). There's only a few solutions to a supply and demand market problem where demand far outstrips supply that actually seem to work. Increase supply, or decrease demand. This has actually been done by some artists and solved the problem. Kid Rock, for example is known to play a large number of dates at a location, inundating with supply to the point only the best tickets can be sold for appreciable markup. Like, in his home town of Detroit, I think he played between 7 and 11 consecutive days in a stadium. Other artists will add dates after the initial sale depending on demand (which often destroys broker profits unless all those dates sell out too). > In a situation like that, scalpers are doing almost all harm. They add liquidity to a situation that already had enough liquidity, and extract tons of money in exchange. How good the liquidity there was and how much harm the brokers caused depends on how accurately demand matched supply. If there were 1000 ticket and 1000 people would ahve eventually bought them, then the brokers didn't really help. At the same time, they probably aren't going to make much money, since 1000 people willing to pay $40 doesn't necessarily mean those 1000 people are willing to pay $60, and given that reseller exchanges charge about 10% of the sale cost, they need to charge a lot more to make a profit. Brokers don't tend to want to buy for events where they can't really make money, so they try to avoid these events. Alternatively, if the event has more tickets than consumers to buy them, brokers don't want to buy those either. Sometimes they do, and they sell at below market, sometimes well below market, just to recoup some of their money (having 20 tickets of 1000 at the event you bought for $40 when there's still 200 for sale on the primary market when the event is in a week means lots of tickets for sale for $20 or way less). Finally, there's events where there's a lot more consumers than there are tickets. Perhaps there weren't enough tickets at the sale day to sell out immediately. It would have sold out well before the event date though, because there are way more consumers than tickets. In this case, at that point liquidity would have dried up. Brokers provide liquidity over the lifetime of the event. That's what they provide, and for that they extract money. There's a debate to be had as to whether they provide enough value for that service, but it's false to say the event had "enough liquidity", as if there was enough liquidity there would be no margin for brokers to make money, especially not the 10% cost on sale price needed to make a profit on the exchanges.
scoopertrooper 5y ago
More often than not price gouging just makes things worse. During the early days of the pandemic you couldn’t find toilet paper in stores, but there were people set up one the road side willing to sell it you for crazy prices. Did these people manage to setup an international supply chain to furnish their road side store? Almost certainly not, they cleaned out the supermarkets ahead of other people. The same thing happened with the colonial pipeline hack.

andechs 5y ago

> moral but are actively ineffective at their stated purpose; they just lead to the hypothetical price-gouge transaction never occurring. If you drive across state lines to bring HAM radios or water filters or what-have-you during hurricane katrina, and try to sell at above market rate, you'll be tossed in jail and your goods will be seized by the police, rather than making it out to the people who actually need them and are willing to pay 2x or 3x the usual price. The reason is they don't want private individuals entering danger zones just to make a buck - a profiteer could easily end up a victim from the dangerous situation.

jtbayly 5y ago
So now emergency workers aren’t allowed to be paid. Congrats.
- Fuzzwah 5y ago
  What? "emergency workers" are not "private individuals".
  - jtbayly 5y ago
    The reasoning against private citizens was that taking risk to make money was inappropriate. That applies equally to emergency workers. And by the way, many workers during emergencies are just private citizens.

lazide 5y ago

Do you have any data on that ‘majority of people buy from scalpers’ claim? One reason for anti price gouging laws is that it is not uncommon for people to buy out all supply, then turn around and charge more/sit on a stockpile to solve the artificially created shortage they themselves created - a term for that being ‘cornering the market’. I haven’t generally seen too much anger at someone legitimately opening up supply by importing more or opening up more supply lines (especially if they say that’s what they’re doing). People have been pretty open to paying more in that case (albeit maybe not 10x more, though that is more because it’s hard to plausibly have such an increase in cost without literally airdropping supplies - which is a different beast).

selectodude 5y ago
There’s no shortage of people who tried to pull that and ended up with tens of thousands of dollars worth of toilet paper and hand sanitizer last year. If there’s not an actual shortage, merely a demand shock, trying to corner a market will not go well for you.
- lazide 5y ago
  And many more that made millions. The ones that get caught get penalized in public/shamed, but there are many more that were not - I personally saw many amazon sellers doing it for months without any apparently penalty.

Dylan16807 5y ago

> The irony is of course that selling at an artificially low price doesn't suddenly make it not for rich people, it just adds a small random chance that you'll be able to convert your own time sitting there refreshing the website across many browsers into a cheaper-than-it-should-be ticket. That depends on the level of demand and how low the price is. It's pretty easy to have a situation where the number of tickets available is higher than the number of people that would have bought tickets for themselves on day one, but you hit immediate shortages when scalpers are also buying. In a situation like that, scalpers are doing almost all harm. They add liquidity to a situation that already had enough liquidity, and extract tons of money in exchange. > If you drive across state lines to bring HAM radios or water filters or what-have-you during hurricane katrina That's the positive case. The negative case is someone buying it and putting it in their garage, or a store vastly increasing the price on something people need and they already had. If you're trying to get paid for your labor, like driving essential supplies around, I would not call that gouging in the first place.

kbenson 5y ago
> It's pretty easy to have a situation where the number of tickets available is higher than the number of people that would have bought tickets for themselves on day one, but you hit immediate shortages when scalpers are also buying. But the total number of people buying tickets is the same, all that's happen is it's being temporally shifted for the gain of the people that can afford to do so. This only works because the actual offered price of the tickets if far below that real cost people are willing to pay. If tickets were initially offered at an accurate price, there would be no money to be made buying them for resale (well, almost. There's still the option for artist demand to change over time with popularity). There's only a few solutions to a supply and demand market problem where demand far outstrips supply that actually seem to work. Increase supply, or decrease demand. This has actually been done by some artists and solved the problem. Kid Rock, for example is known to play a large number of dates at a location, inundating with supply to the point only the best tickets can be sold for appreciable markup. Like, in his home town of Detroit, I think he played between 7 and 11 consecutive days in a stadium. Other artists will add dates after the initial sale depending on demand (which often destroys broker profits unless all those dates sell out too). > In a situation like that, scalpers are doing almost all harm. They add liquidity to a situation that already had enough liquidity, and extract tons of money in exchange. How good the liquidity there was and how much harm the brokers caused depends on how accurately demand matched supply. If there were 1000 ticket and 1000 people would ahve eventually bought them, then the brokers didn't really help. At the same time, they probably aren't going to make much money, since 1000 people willing to pay $40 doesn't necessarily mean those 1000 people are willing to pay $60, and given that reseller exchanges charge about 10% of the sale cost, they need to charge a lot more to make a profit. Brokers don't tend to want to buy for events where they can't really make money, so they try to avoid these events. Alternatively, if the event has more tickets than consumers to buy them, brokers don't want to buy those either. Sometimes they do, and they sell at below market, sometimes well below market, just to recoup some of their money (having 20 tickets of 1000 at the event you bought for $40 when there's still 200 for sale on the primary market when the event is in a week means lots of tickets for sale for $20 or way less). Finally, there's events where there's a lot more consumers than there are tickets. Perhaps there weren't enough tickets at the sale day to sell out immediately. It would have sold out well before the event date though, because there are way more consumers than tickets. In this case, at that point liquidity would have dried up. Brokers provide liquidity over the lifetime of the event. That's what they provide, and for that they extract money. There's a debate to be had as to whether they provide enough value for that service, but it's false to say the event had "enough liquidity", as if there was enough liquidity there would be no margin for brokers to make money, especially not the 10% cost on sale price needed to make a profit on the exchanges.

scoopertrooper 5y ago

More often than not price gouging just makes things worse. During the early days of the pandemic you couldn’t find toilet paper in stores, but there were people set up one the road side willing to sell it you for crazy prices. Did these people manage to setup an international supply chain to furnish their road side store? Almost certainly not, they cleaned out the supermarkets ahead of other people. The same thing happened with the colonial pipeline hack.