The new forums will be named Coin Return (based on the most recent vote)! You can check on the status and timeline of the transition to the new forums here.
The Guiding Principles and New Rules document is now in effect.
StubHub And The Insanity Of Free Market Worship
AngelHedgie
Registered User regular
Registered User regular
So, as you may have heard, online ticket reseller StubHub must turn over the names of MA residents who used their service to resell Patriots tickets to the Pats. The idea is so that the Patriots can find season ticket holders and rescind their tickets.
That's the backstory. The real meat of this thread is what happens when you let the usual suspects at such a story. Because the free market apologists have all come out of the woodwork to denounce the Patriots' move, claiming that scalpers are only equalizing the markets at the appropriate price.
To say that this is idiocy is to demean all the honest idiots out there.
As people have pointed out, there's a whole lot more to this. For the Patriots, ticket prices are balanced by the goal of getting as much profit as possible against the need to maintain a viable franchise into the future. Yes, the Pats could probably double or triple ticket prices, at the very least. For now. But if they did so, this would alienate the core fans in the lower demographics, the ones that stick with the team over the lean years. The result would be that the team would be in a world of hurt if it ever stopped winning. So the team has a vested interest in making sure that tickets are affordable to the regular fans, even if this means that the price is lower than what the market would bear.
To a rational viewer, this is just another illustration of how the free market is indeed imperfect, as it ignores external calculations like this. But to the free market worshippers, it is not the free market who is flawed, but the Patriots. They should be extracting as much revenue as the market will allow - and who cares if doing so has negative repercussions? And if they're not, then someone will. Oh, and let's ignore the ways that scalpers distort the market in the first place - like using specialized software that allows them to order up all the tickets before anyone else, basically allowing them to set whatever price they want.
Yet again, another perfect example why whenever you hear someone extolling the virtues of the free market, you should check to see if your wallet is still there.
That's the backstory. The real meat of this thread is what happens when you let the usual suspects at such a story. Because the free market apologists have all come out of the woodwork to denounce the Patriots' move, claiming that scalpers are only equalizing the markets at the appropriate price.
To say that this is idiocy is to demean all the honest idiots out there.
As people have pointed out, there's a whole lot more to this. For the Patriots, ticket prices are balanced by the goal of getting as much profit as possible against the need to maintain a viable franchise into the future. Yes, the Pats could probably double or triple ticket prices, at the very least. For now. But if they did so, this would alienate the core fans in the lower demographics, the ones that stick with the team over the lean years. The result would be that the team would be in a world of hurt if it ever stopped winning. So the team has a vested interest in making sure that tickets are affordable to the regular fans, even if this means that the price is lower than what the market would bear.
To a rational viewer, this is just another illustration of how the free market is indeed imperfect, as it ignores external calculations like this. But to the free market worshippers, it is not the free market who is flawed, but the Patriots. They should be extracting as much revenue as the market will allow - and who cares if doing so has negative repercussions? And if they're not, then someone will. Oh, and let's ignore the ways that scalpers distort the market in the first place - like using specialized software that allows them to order up all the tickets before anyone else, basically allowing them to set whatever price they want.
Yet again, another perfect example why whenever you hear someone extolling the virtues of the free market, you should check to see if your wallet is still there.
XBL: Nox Aeternum / PSN: NoxAeternum / NN:NoxAeternum / Steam: noxaeternum
AngelHedgie on
0
Posts
What Idiots. Scalpers are not helping the free market. they are an extra layer between the patriots and their fans.
Pat--ticket office--scalpers--fans
Scalpers are really a form of useless Bureaucracy adding more hassle and cost to tickets without really adding value.
You can call it many things but not the free market in action.
Called brokering. People buy out major events they know are going to sell well. They also use programs that get around security measures on websites like TicketMaster. In a recent bit I read about the Hannah Montana thing something like 80% of tickets are snapped up by brokers and that shows sell out in matters of minutes. The people who actually want to see the show with their kids do not even get a chance at a ticket that is the original price. The prices instantly skyrocket. I think that show started at $63 for a ticket and after the brokers were done it was well over $200.
Shogun Streams Vidya
The problem I have is with electronic scalping, i.e. scalpers using software to buy all the tickets so the fans have no option but to pay higher than they would have otherwise.
If someone wants to pay ten thousand bucks for a ticket, let them. It is not harmful to anyone. If, however, all tickets were going for ten thousand bucks, then you could make the case that it is hurting the Pats by alienating their fans, the vast majority of whom would probably not pay that much for a ticket.
Dude, just because it's inefficient doesn't mean it's not the free market in action. StubHub is more efficient at getting tickets than Joe and Jane Blow, so without recourse to "morality", "common sense", or any other form of normative, value-laden, anti-market thinking, can you explain why shouldn't they be able to profit off that efficiency?
Agreed. If you get tickets for your family for a game and have an emergency you should not have to eat that expense for nothing. I don't mind people on the sidewalk at UT games looking for tickets and stuff but electronic brokers are exploiting the system to make an economic profit.
Shogun Streams Vidya
You just have to take simple measures, like making sure one person can only buy X number of tickets, and implementing better security mechanisms for e-commerce websites.
Well, if you'd read the thread, or read up on the subject, sites like this use automated programs to buy up the bulk of tickets about a millisecond after they become available. Waiting till the last minute has absolutely nothing to do with this.
Airlines charging more for last-minute ticket purchases is entirely different. It is not scalping.
Ticket prices go up as the time of the flight approaches as a means of discouraging the customers from making last-minute travel plans, because such purchases tend to be wild and unpredictable from the perspective of the business.
Okay, my bad. (I am at work, and don't like opening new tabs if I don't have too.) I didn't realize that there was shit like this going on. What I was talking about was just random guys walking around the parking lot selling tickets. Just from what you said, yeah that sounds like bull shit and it sucks.
Yeah, I understand that and all. Actually, now that I read that again, I am really not sure where I was trying to go with it...O_o
http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20071020/montana_sensation_071020/20071020?hub=World
That's what I can find at the moment. I am glad the judge ordered that company to stop. I read about the company the other day but I can't remember the name to look for the article.
Shogun Streams Vidya
Because they aren't employing it to offer any services whatsoever?
Sure they are. They're extracting the real worth of the ticket, since evidently there's no shortage of people willing to pay many, many times the listed price.
On the pro-scalpers side, the individual scalper (someone who sells very few tickets relative to the total supply, ie the four tickets for a game from their season passes) really are benefiting everyone involved. They are getting a cash value greater than they value the good at (or else they wouldn't scalp the ticket) and who ever buys the tickets is getting to exchange what they think is a fair value for going to an event they wouldn't be able to, or having better seats than they would have before, or what have you. The team benefits by having more people in the stadium, using the concessions and presumably helping everyone else have a good time (full crowds of people who want to be there are more fun for everyone than empty seats).
Everyone benefits, and since the tickets would have gone to waste no one is losing anything.
On the anti-scalper side, the Patriots have the right to decide how their tickets are used, and apparently make it quite clear in the agreement season ticket holders sign that resale (above face value or at all, the details escape me) is forbidden. I may think it's stupid, it may be hurting everyone involved needlessly, but it is nominally their right to make that decision, baring the fact most stadiums are in part or in full publicly funded and society at large should theoretically have a say.
Foaming accusations aside, no one with even the slightest shred of legitimacy thinks having a few buyers create a de facto monopoly by buying all the tickets and controlling the supplies is either a good thing or a triumph of the free market. The same way the fact some libertarians are outright anarchists doesn't mean all libertarians are idiots the fact some "capitalists" will say any stupid thing that pops into their head doesn't mean capitalists at large or pro-free market people think monopolies or the minority of abusive scalpers are good.
tl'dr Even basic economics tells you small scale scalping (at the individual level) is good for everyone involved, and that monopolistic scalping is bad.
I guess that makes sense for a model where the real worth of the ticket is exactly equal to the maximum price the market will bear, but it can't take the intangibles, like the value of reputation with more frugal demographics, into account. Although, I don't think I can argue that the margin between original and resale ticket prices is even on the same order of magnitude as the value of those more abstruse aspects, so maybe the point is moot.
"C'mon man, function of demand and all that, these rocks don't push themselves"
Have you seen The Wire? The main drug dealer is taking economics in community college, and later gives lectures on elasticity of demand to his befuddled employees.
I thought we were talking about situations where the event would have sold out with or without scalping.
In this case, presumably the four tickets from the season pass would have gone unused, despite having been technically sold.
And that is a situation in which I don't see the same potential for harm I do in purchasing tickets with the express purpose of reselling.
And that's really what I was talking about. While it's certainly better than nothing to let people sell their tickets for face value (which actually wasn't the case here, the Patriots are saying you are forbidden from reselling at all unless you go through their official TicketMaster venue, which is a whole other level of hypocracy, but leave that aside since it's their tickets and they can do what they want).
While the scalper can (best case) break even reselling at face value, that isn't the best possible outcome. The fact people are willing to pay more means there are many people out there who want the tickets and would be willing to give more that face value. If there are many people who want a limited resource, the best way (we've found so far, baring fucking with the market, etc etc) to decide who gets it is to give it to the person who is willing to give the most for it.
If you sell it at a lower price than the market can bear, then you are keeping someone who wants to go to the event "more" out and the seller is getting less for the valuable good they have. Basically, If person A wants to give you more than person B, but person B through luck of the draw pays the lower price first, you and person A are worse off and only person B is better off. It's not the end of the world, but it is worse than it could be.
The best rule of thumb seems to be while the free market isn't magic, there is a lot it does right as long as you make sure no one does anything especially unfair.
Oh, certainly. The issue, though, seems to be primarily one of intent. I don't object to restrictions on resale above face value, it's just that I'd be less inclined to campaign against this resale when the original purchase was with the intent of actually being present.
Which, when you don't preface it as if it was class warfare, isn't necessarily a bad thing.
Given the people who have the most money have done the most valuable work (as far as society is concerned) to earn said money, it's not a bad system to reward them with the ability to have first right of refusal to goods they want. It's a simple fact the less of something popular there is the more it will cost, which is the only "fair" way to distribute scare goods. That idea ALWAYS leads into a long tangential argument though, so it might not be a track worth going down.
Frankly, the best argument I've heard against ticket scalping for sporting events has nothing to do with this rich/poor dichotomy, it instead points out that stadiums tend to be publicly funded and there is something to be said for keeping ticket prices in proportion with the population's general wealth as a matter of evenly distributing access to a public good. Once you get into the realm of public funding a lot of the traditional economic analysis gets set aside.
In theory.
--
Alternatively: We need hella more concerts.
By unfair (which was a more word choice, but it's late and I'm tired) I meant more along the lines of distorted the relationship between supply and demand for everyone else, not unfair in the conversational sense. I don't see anything wrong with one person buying a season pass and selling all the tickets individually at a profit. It's just the same scalper analysis I did before applied to each ticket individually.
The only unfair behavior in a scalping kind of situation would be to buy all or a significant proportion of the tickets, and by artificially limiting the supply drive the price through the roof. That's a classic monopoly, and it's hurting everyone else involved for the sole benefit of the seller.
If anything, what you described would be MORE fair to the people who can't afford season passes, because they are given access to the cheaper individual units.
It's by no stretch of the imagination perfect in the real world, or free from possible distortion, but it falls under the classic Churchill quote, the worst possible system except for all the others.
Yep.
Still sucks to be those poor people who really want to see a concert.
Especially since the loathing likely to develop of the upper classes is likely to actually KEEP them poor because it's harder to freely network with people you want to stab in the eyes.
Yeah, it's a good thing that's not what happens all the time isn't it.
I'm a season ticket holder with the Carolina Panthers and just this year, through Ticketmaster, they implemented a new way of re-selling tickets that you aren't able to use. This program is called Ticket-Exchange and allows you to LEGALLY sell your tickets at face value to somebody through Ticketmaster. The only catch in all this is, Ticketmaster and the team are screwing you so hard up the ass in terms of what you ultimately make off the ticket, that NOBODY in their right mind would take advantage of selling tickets this way. Instead of the full price of the ticket you paid full price for going towards your season ticket payment for the next year, the team takes 10% BACK into their own pockets and then Ticketmaster has their own fee, which can be another $5-6. It's a ripoff system plain and simple. Stubhub and others (gotickets comes to mind) provide a service for those who are selling the tickets they can't use but want to get the FULL PRICE of what they paid in return.
The scalpers and ticket brokerages that truly gouge the fans do indeed suck, and they do need to be stopped, but that's why you investigate them on a personal level. You don't go after your whole fanbase who you're already trying to screw over with your own service and start fucking with the legit people just trying to get face value back.
Although to be quite honest in all of this... it really couldn't happen to a greater set of fans than those sorry-assed New England douches.
PSN: HooverFanPA
Steam: HooverFan
And what purpose would eliminating scalpers serve for the venues? If only the people with disposable income are showing up to watch, those are the same people your associated markets are targeting (memorabilia, apparel, video games, whathaveyou). The incentive isn't there for those in control to change things for the lower income fans. If anything, it's the exact opposite.
The problem is, this should be illegal. If the stadiums want to charge through the nose for their tickets, let them. That is the market, because they provide the service. The scalper in this equation serves no purpose but to make a profit off of a good that he neither made or was needed to purvey. It's a redundancy that only serves to profit people not actually part of the cycle; scalpers do not watch the game, nor do they earn money for the stadium past market value.
The big thing, this is all well and good and I think we all mostly agree that wholesale scalping is fairly criminal. The question is, how do we stop it? With the technology available today, I don't think law enforcement can stay a step ahead of the scalpers. Therefore, I can only think of two viable options:
1.) Have the league put pressure on the owners to increase ticket sales to market value, or
2.) Make everyone buy tickets at the gate on gameday
While the latter option would be probably roundly hated by the public, it's really the only sure way that I can think of that doesn't increase costs to them. Unfortunately, the more realistic option is for the owners to jack ticket prices so high that only people who actually want to see the game pay for tickets. And as much as that sucks, it's fair. The only reason scalpers are a problem right now is because the original market isn't showing the actual value of the tickets. Without new legislation, the only people who can change the way this works is the team owners, and right now there simply isn't any motivation to do so.
The people who you call Free Market worshippers are just fools with pretty simplistic understandings of how markets actually work - but because the village idiot calls himself Queen, doesn't mean you blame HM Elizabeth II when he pisses all over himself.
Unless this is hiding a general contempt for the idea of markets working as an efficient means of distribution at all, in which case I am interested to hear your alternative?