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Price discovery is not 'artificial inflation' - it contributes to efficiency. In effect, they will have decided that the natural supply/demand situatio

by cturner 17y ago

Price discovery is not 'artificial inflation' - it contributes to efficiency. In effect, they will have decided that the natural supply/demand situation is unsuitable to them and manipulated the market to create an artificial scarcity. No - the situation where artificial scarcity occurs is where people who buy the tickets are prevented from onselling them. In this case the venue has an advantage that contributes to economic inefficiency. The interests of the ticket maker and the efficiency of the economy are separate considerations. Even in the situation where one scalper gets all the tickets, if they sell them to people who are themselves then free to onsell them then even this creates a more efficient market than what you have when the venue has a monopoly over the direction of transactions. I always thought it was strange that event venues were able to coax legislators into introducing anti-scalping legislation. It's only now I see the arguments being brought against scalpers that I appreciate the murkiness of the issue when pitched from certain perspectives.

ubernostrum 17y ago
In this case the venue has an advantage that contributes to economic inefficiency. The same total sum of goods and services is available with scalpers buying up the supply, but those goods and services are now provided at higher total cost than otherwise. This is, so far as I'm aware, the definition of inefficiency and consists solely of artificial inflation of prices.
- cturner 17y ago
  OK, thanks. I see that now. In the scenario discussed above in the thread this is the case. This provides an example of where scalpers have a negative effect on the market, something I indicated I couldn't see earlier. Although this isn't the universal case, because scalpers can compete against the hosue at a later point in the market, and offset attempts by the house to segment the market, and can lose out at times causing sale at a loss to themselves.

by cturner 17y ago

ubernostrum 17y ago

In this case the venue has an advantage that contributes to economic inefficiency. The same total sum of goods and services is available with scalpers buying up the supply, but those goods and services are now provided at higher total cost than otherwise. This is, so far as I'm aware, the definition of inefficiency and consists solely of artificial inflation of prices.

cturner 17y ago
OK, thanks. I see that now. In the scenario discussed above in the thread this is the case. This provides an example of where scalpers have a negative effect on the market, something I indicated I couldn't see earlier. Although this isn't the universal case, because scalpers can compete against the hosue at a later point in the market, and offset attempts by the house to segment the market, and can lose out at times causing sale at a loss to themselves.