4 ms·

I'm going to disagree some here. When people claim starups aren't creating value, I always push back - just because they aren't creating value to you does not

I'm going to disagree some here. When people claim starups aren't creating value, I always push back - just because they aren't creating value to you does not mean that they are't creating value to someone else. In this case, people value reservations; its the same thing with concerts or sporting events with scalpers - the price does not reflect market value - that value is being allocated already to people who may not perceive it as such. Now, artists can choose to counter this in obvious ways (Louis CK had a great approach by requiring ID's to limit scalping potential), but if they choose to ignore it, I think there's a reasonable business opportunity. Now if a restaurant chose to counter this TOS by say , requiring a credit card for each reservation, they are well within their rights.

wpietri 12y ago
Scalpers do not create value. At a concert the value is being created by the performers, and it's not like scalpers create seats or make the show longer. They just shift value around to people with more money.
- rahimnathwani 12y ago
  Scalpers do create value. After a complete scalping transaction: - the original ticket purchaser is happier with the cash received than with the ticket they had before - the final ticket purchaser is happier with the ticket than with the cash they paid - the scalper is happy with his/her profit - the promoter's/venue's revenue is unaffected So, three people are better off. Value has been created.
  - neumann 12y ago
    I do not understand this logic. What original ticket purchaser? Scalpers aren't like eBay. They have bought up the tickets from the venue at certain amount, depriving others of a limited resource at that same value, and now offering it a higher value to people who didn't have the means to buy it as fast as the scalper. The disruption the scalper is introducing into an existing system benefits nobody but themselves.
    - rahimnathwani 12y ago
      I'm not willing to pay more than face value for tickets so, if scalpers didn't exist, I would be better off. I'd have an x% chance (where x<100) of getting tickets at face value. There are rich people who are willing to pay up to 4x face value. They are very happy to pay 2x face value and get to go to every show they want. Without scalpers, they would pay less per show, but would totally miss out on some shows. The scalper benefits those guys, at the expense of guys like me. It's not true that the scalper benefits nobody but themselves.
      - neumann 12y ago
        That's a good point I had (subconcisouly refused) to consider as value. Value is added to the rich. Further offending my socialist dream. ;)
    - lmm 12y ago
      Yesterday I bought a ticket at >2x face value for a concert on Monday. That's value for me - I'd like to be able to go to things without having to plan my life months in advance, and I'm willing to pay for the privilege. Supply isn't set in stone. If scalpers buy up tickets early on then they take on the risk that a show won't sell out, and that allows the promoters to move to a bigger venue (as happened in this case), add more nights, or even raise prices. So the promoter benefits too. It's no different from any other middleman: find someone who's selling at price x, find someone who's buying at y > x, connect them together and take your cut. Which is what makes capitalism works.
      - wpietri 12y ago
        You're missing the negative externality: the person who couldn't get in because you're paying some scalping dick. And let's not forget the performers, who are interested in performing for their best fans, and who try to set ticket prices accordingly.
  - jblow 12y ago
    No, because the final ticket purchaser would have been even happier with the ticket plus the extra cash he would have had if he had not needed to buy from the scalper, and/or the venue or promoter would have been happier with the extra money that is instead taken by the scalper. Come on, this is obvious.
    - rahimnathwani 12y ago
      No, because the final ticket purchaser would have been even happier with the ticket plus the extra cash he would have had if he had not needed to buy from the scalper But in my example, he wouldn't have gotten the ticket at all. The ticket would have been had by someone like me, who was barely willing to pay the face value, but was lucky enough to get one of the limited supply of tickets when they were released for sale. and/or the venue or promoter would have been happier with the extra money that is instead taken by the scalper But in my example the venue or promoter has already set the price lower than the market-clearing price. If s/he hadn't done that, then the scalper would not have popped into existence, as the market would already have cleared.
  - gizmo686 12y ago
    Your analysis is slightly off. In a world without scalpers, the original ticket purchaser would not exist, because he bought the ticket for the purpose of selling it. However, your general thought is good. In a world without scalpers, person A and B both have a 50% of buying the ticket at price $X. However, the ticket is worth more to B than it is to A (in terms of real utility, not monetary value). There is real value created by increasing the chances of B getting the ticket. The most effective mechanism we have found to maximize the chances that B gets the ticket in this situation is market pricing, which is what scalpers enable.
    - rahimnathwani 12y ago
      I see your point. However, many times people buy tickets to a show because they intend to go, but then something comes up, or their financial situation changes, or demand outstrips supply to the extent that the open market price exceeds the value to them. That's the situation I was imagining when I wrote my post. My original post has as many comments as downvotes, which I take to mean it wasn't a useless post, but that people disagree that scalpers add value. The funny thing is, I would prefer a world without scalpers, and in which I had an equal chance to buy underpriced tickets. If I were rich, I would probably prefer the current situation, or one in which tickets were priced dynamically, like plane tickets are now.
    - wpietri 12y ago
      What's your evidence that a market mechanism is most useful here? When I think of the best concerts I've seen, the ones I really loved, they were mostly when I was young and broke. Now that I'm older and have money I can afford to go more concerts, but I generally care less. I could well be pushing out very passionate fans. I suspect a better mechanism in this case is making people pay in a currency in which we are all more or less equal: time. If the venue just started selling tickets in one spot at a particular time, the people in line first would be the very passionate fans, the ones who dropped everything to get in line early.
  - icebraining 12y ago
    By shifting the demographics of the audience, it can reduce the value of the show. Quoting Kid Rock, who has been trying to eliminate scalpers: Kid Rock and his team are reserving the first two rows for die-hard fans only. No matter how much money you've got, you can't buy your way into them. "They are not for sale, " Kid Rock says. "I'm tired of seeing the old rich guy in the front row with the hot girlfriend. And the hot girlfriend, you know, with her boobs hanging out,with her beer in the air, just screaming the whole time. The old rich guy is standing there like he could[n't] care less. It's a very common theme at Kid Rock concerts." http://www.npr.org/blogs/money/2013/06/27/196277836/kid-rock-takes-on-the-scalpers http://www.npr.org/blogs/money/2013/06/27/196277836/kid-rock...
neumann 12y ago
> just because they aren't creating value to you does not mean that they are't creating value to someone else. True, but follow that logic, and replace 'create' with 'revoke/destroy'. These apps are proposing a tiering system that favours people willing to trade money for convenience, and _simultaneously depriving those how aren't willing or can't_. So this pay to use system is scalping limited resources at a cost to others, and profiting middle men piggybacking of existing infrastructure. I think the article made a clear argument for why this is not okay. The proposal that you can require a credit card for each reservation escalates the situation, because now in order to stop scalpers from operating, the bar for entry is raised. If people are independently abusing the system, then this is the logical way to combat the problem. But if it is a parasitic entity then regulation is sensible way to protect the business and its customers (eg. some who might not have credit cards). Often when these arguments are raised people argue as back and forth as if economics and law are the only considerations. What about considerations towards decency? How annoyed would you be if you tried going to a restaurant, saw empty car spaces installed by your local council, but people standing in them holding signs saying "Reserved. Yours for $4". Finally, you arrive at the restaurant but get told that is is full. A guy out the front waves you down, 'psst. I have 10 reservations - want one? $5 bucks.' Not only that, the guy is part of an organization that has done it to all the other restaurants in the area.

wpietri 12y ago

Scalpers do not create value. At a concert the value is being created by the performers, and it's not like scalpers create seats or make the show longer. They just shift value around to people with more money.

rahimnathwani 12y ago
Scalpers do create value. After a complete scalping transaction: - the original ticket purchaser is happier with the cash received than with the ticket they had before - the final ticket purchaser is happier with the ticket than with the cash they paid - the scalper is happy with his/her profit - the promoter's/venue's revenue is unaffected So, three people are better off. Value has been created.
- neumann 12y ago
  I do not understand this logic. What original ticket purchaser? Scalpers aren't like eBay. They have bought up the tickets from the venue at certain amount, depriving others of a limited resource at that same value, and now offering it a higher value to people who didn't have the means to buy it as fast as the scalper. The disruption the scalper is introducing into an existing system benefits nobody but themselves.
  - rahimnathwani 12y ago
    I'm not willing to pay more than face value for tickets so, if scalpers didn't exist, I would be better off. I'd have an x% chance (where x<100) of getting tickets at face value. There are rich people who are willing to pay up to 4x face value. They are very happy to pay 2x face value and get to go to every show they want. Without scalpers, they would pay less per show, but would totally miss out on some shows. The scalper benefits those guys, at the expense of guys like me. It's not true that the scalper benefits nobody but themselves.
    - neumann 12y ago
      That's a good point I had (subconcisouly refused) to consider as value. Value is added to the rich. Further offending my socialist dream. ;)
  - lmm 12y ago
    Yesterday I bought a ticket at >2x face value for a concert on Monday. That's value for me - I'd like to be able to go to things without having to plan my life months in advance, and I'm willing to pay for the privilege. Supply isn't set in stone. If scalpers buy up tickets early on then they take on the risk that a show won't sell out, and that allows the promoters to move to a bigger venue (as happened in this case), add more nights, or even raise prices. So the promoter benefits too. It's no different from any other middleman: find someone who's selling at price x, find someone who's buying at y > x, connect them together and take your cut. Which is what makes capitalism works.
    - wpietri 12y ago
      You're missing the negative externality: the person who couldn't get in because you're paying some scalping dick. And let's not forget the performers, who are interested in performing for their best fans, and who try to set ticket prices accordingly.
- jblow 12y ago
  No, because the final ticket purchaser would have been even happier with the ticket plus the extra cash he would have had if he had not needed to buy from the scalper, and/or the venue or promoter would have been happier with the extra money that is instead taken by the scalper. Come on, this is obvious.
  - rahimnathwani 12y ago
    No, because the final ticket purchaser would have been even happier with the ticket plus the extra cash he would have had if he had not needed to buy from the scalper But in my example, he wouldn't have gotten the ticket at all. The ticket would have been had by someone like me, who was barely willing to pay the face value, but was lucky enough to get one of the limited supply of tickets when they were released for sale. and/or the venue or promoter would have been happier with the extra money that is instead taken by the scalper But in my example the venue or promoter has already set the price lower than the market-clearing price. If s/he hadn't done that, then the scalper would not have popped into existence, as the market would already have cleared.
- gizmo686 12y ago
  Your analysis is slightly off. In a world without scalpers, the original ticket purchaser would not exist, because he bought the ticket for the purpose of selling it. However, your general thought is good. In a world without scalpers, person A and B both have a 50% of buying the ticket at price $X. However, the ticket is worth more to B than it is to A (in terms of real utility, not monetary value). There is real value created by increasing the chances of B getting the ticket. The most effective mechanism we have found to maximize the chances that B gets the ticket in this situation is market pricing, which is what scalpers enable.
  - rahimnathwani 12y ago
    I see your point. However, many times people buy tickets to a show because they intend to go, but then something comes up, or their financial situation changes, or demand outstrips supply to the extent that the open market price exceeds the value to them. That's the situation I was imagining when I wrote my post. My original post has as many comments as downvotes, which I take to mean it wasn't a useless post, but that people disagree that scalpers add value. The funny thing is, I would prefer a world without scalpers, and in which I had an equal chance to buy underpriced tickets. If I were rich, I would probably prefer the current situation, or one in which tickets were priced dynamically, like plane tickets are now.
  - wpietri 12y ago
    What's your evidence that a market mechanism is most useful here? When I think of the best concerts I've seen, the ones I really loved, they were mostly when I was young and broke. Now that I'm older and have money I can afford to go more concerts, but I generally care less. I could well be pushing out very passionate fans. I suspect a better mechanism in this case is making people pay in a currency in which we are all more or less equal: time. If the venue just started selling tickets in one spot at a particular time, the people in line first would be the very passionate fans, the ones who dropped everything to get in line early.
- icebraining 12y ago
  By shifting the demographics of the audience, it can reduce the value of the show. Quoting Kid Rock, who has been trying to eliminate scalpers: Kid Rock and his team are reserving the first two rows for die-hard fans only. No matter how much money you've got, you can't buy your way into them. "They are not for sale, " Kid Rock says. "I'm tired of seeing the old rich guy in the front row with the hot girlfriend. And the hot girlfriend, you know, with her boobs hanging out,with her beer in the air, just screaming the whole time. The old rich guy is standing there like he could[n't] care less. It's a very common theme at Kid Rock concerts." http://www.npr.org/blogs/money/2013/06/27/196277836/kid-rock-takes-on-the-scalpers http://www.npr.org/blogs/money/2013/06/27/196277836/kid-rock...

neumann 12y ago

> just because they aren't creating value to you does not mean that they are't creating value to someone else. True, but follow that logic, and replace 'create' with 'revoke/destroy'. These apps are proposing a tiering system that favours people willing to trade money for convenience, and _simultaneously depriving those how aren't willing or can't_. So this pay to use system is scalping limited resources at a cost to others, and profiting middle men piggybacking of existing infrastructure. I think the article made a clear argument for why this is not okay. The proposal that you can require a credit card for each reservation escalates the situation, because now in order to stop scalpers from operating, the bar for entry is raised. If people are independently abusing the system, then this is the logical way to combat the problem. But if it is a parasitic entity then regulation is sensible way to protect the business and its customers (eg. some who might not have credit cards). Often when these arguments are raised people argue as back and forth as if economics and law are the only considerations. What about considerations towards decency? How annoyed would you be if you tried going to a restaurant, saw empty car spaces installed by your local council, but people standing in them holding signs saying "Reserved. Yours for $4". Finally, you arrive at the restaurant but get told that is is full. A guy out the front waves you down, 'psst. I have 10 reservations - want one? $5 bucks.' Not only that, the guy is part of an organization that has done it to all the other restaurants in the area.