Wednesday, June 05, 2013

Concert Tickets and Optimal Economics

From time to time some economist notes that the presence of scalpers proves that event tickets (concerts, sports, etc.) are underpriced.  Is a more optimal system possible?

Sure.  Just auction all the seats off.  If the dirty work were allocated to buyers and sellers computers, even the nuisance factor might be minimized.  That way each seat could be sold for the maximum someone is willing to pay for it.  Airlines are already approaching that kind of allocation system.

I predict it won't happen though.  Mostly because it's likely to really piss everybody off.  Frustrated fans will abandon the system in droves in annoyance.  Artists will be terrified of the prospect of an empty stadium.  People really like to reduce uncertainty in their lives.  If the stakes are high enough, they will play the game.  Otherwise, forget it.