{"id":2088,"date":"2016-08-16T09:18:49","date_gmt":"2016-08-16T16:18:49","guid":{"rendered":"http:\/\/www.artsjournal.com\/worth\/?p=2088"},"modified":"2016-10-22T13:39:33","modified_gmt":"2016-10-22T20:39:33","slug":"bots-and-ticket-prices-and-supply-and-demand","status":"publish","type":"post","link":"https:\/\/www.artsjournal.com\/worth\/2016\/08\/bots-and-ticket-prices-and-supply-and-demand\/","title":{"rendered":"Bots and ticket prices and supply and demand: updated 22-10-16"},"content":{"rendered":"

\"'two<\/a>The Verge<\/em> reports<\/a> on new efforts from Lin-Manuel Miranda and New York Senator Chuck Schumer to crack down on those who use “bots” to quickly, and in bulk, purchase scarce tickets on primary sites to then resell on secondary markets at a mark-up. The story quotes Mr. Miranda saying,<\/p>\n

“My concern is that our show [Hamilton] is about the founding of our country and if bots are buying up all the tickets and charging this insane secondary market price, most of the country can’t see it.”<\/p><\/blockquote>\n

I can see Mr. Miranda wanting something done about bots – he wants ticket prices sold at a lower rate than obtains in the secondary market.<\/p>\n

But. There are a limited number of seats available to see a performance of Hamilton<\/em>. All the shows are filled to capacity. That means, whether tickets are sold at face-value prices, or at a mark-up in secondary markets, or given away for free through some sort of lottery, most of the country can’t see it<\/em>. The tickets are a scarce good. Legislation on secondary markets will influence who<\/em> gets to see the show, and who profits from it, but it won’t get more people into the show.<\/p>\n

If the producer of a concert, musical or festival wants to charge a face-value price well below the market-clearing price, they have a challenge. They can insist that buyers of tickets show some kind of identification at the venue, but that prevents what can be convenient and beneficial resale between people who have tickets they find they no longer want, and people who really want to see the show but didn’t manage to get tickets when they first went on sale. This is a difficult market to regulate, and it’s not clear whether one would want<\/em> to regulate it, except against fraud and misrepresentation.<\/p>\n

Legislation against the use of bots is reasonable if the primary seller has specified, with its terms of sale, that the buyer has to be a real human who is limited in the total amount he\/she can purchase (i.e. bot legislation is anti-fraud legislation). But whether this will sort out the problem of very high prices on secondary markets is another matter.<\/p>\n

Footnote: I reviewed the (UK) Waterson committee report on secondary ticket markets (which I thought was excellent in its analysis) for Cultural Trends<\/em> here<\/a> (sorry that it’s gated…)<\/p>\n

UPDATE: The Stage<\/em> reports<\/a> on the number of people who bought tickets for Harry Potter and the Cursed Child being turned away because they bought the tickets on secondary markets.<\/p>\n

In a statement to The Observer<\/a>, which found that some sites were selling tickets to the play for more than \u00a38,000, they said: \u201cThe secondary ticket market is an industry-wide plague and one which we as producers take very seriously.\u201d<\/p>\n

They added: \u201cOur priority is to protect all customers and we are doing all we can to combat this issue.\u201d<\/p>\n

Friedman and Callender went on to say that they had been able to \u201cidentify, and refuse entry, to a significant number of people who purchased tickets through resale sites\u201d.<\/p><\/blockquote>\n

How exactly is the ability to trade tickets after initial purchase “a plague”? How exactly are primary sellers “doing all we can to combat the issue”? Besides, that is, by taking it out on people who weren’t able to get tickets initially, since they were priced with a full expectation of very high levels of excess demand, and were thus only able to obtain a ticket through secondary markets?<\/p>\n

UPDATE 22-10-16: Greg Mankiw writes<\/a> that he paid $2,500 per ticket to see Hamilton, and that he was glad he could:<\/p>\n

\n

some people might object to this price. Terms like \u201cscalping\u201d and \u201cprice gouging\u201d are pejoratives used to demonize those who resell tickets at whatever high prices the market will bear.<\/p>\n

To be sure, most people can\u2019t easily afford paying so much for a few hours of entertainment. That is indeed lamentable. The arts expand our horizons, and in a perfect world, everyone would have the opportunity to see a megahit like \u201cHamilton.\u201d<\/p>\n

Yet there is another way to view the situation. It was only because the price was so high that I was able to buy tickets at all on such short notice. If legal restrictions or moral sanctions had forced prices to remain close to face value, it is likely that no tickets would have been available by the time my family got around to planning its trip to the city.<\/p>\n

High prices are a natural reflection of great demand and scant supply. In a free market, in which private individuals can engage in mutually advantageous gains from trade, they are inevitable until demand subsides or supply expands.<\/p>\n<\/blockquote>\n

And he is correct. With no secondary markets, there is no way for those unable to plan far in advance to get a ticket, nor any way for someone who has bought a ticket early, but can no longer attend, of transferring the ticket. I don’t think anybody really wants to ban secondary sales (do they?), or to put an unenforceable limit on what price can be charged in that market.<\/p>\n

The problem can’t be that “everybody should be able to see Hamilton, even those without $2,500 to spend on a ticket”, because with a limit on the number of seats, there is no way to get everyone to see it. There is no physical capacity for that to happen. So the real question, as I said above, is who<\/em> gets to see it.<\/p>\n

If the primary ticket sellers want the “who” to be “people who are not robots who are somehow adept enough with technology to get to the front of the (virtual) line in time” or “people who win in a lottery we will conduct for tickets”, they will still face the issue that some of these people will be individuals with an intent to resell should they get lucky and get tickets in the primary round. They could go a step further and require i.d., but again that would shut out people who really<\/em> want to see the show but are uncertain about when they might be in New York with a free evening or afternoon.<\/p>\n

Is Professor Mankiw’s advice to simply charge market prices (with calculated scaling of the house) really such a bad idea, compared to the alternative?<\/p>\n","protected":false},"excerpt":{"rendered":"

The Verge reports on new efforts from Lin-Manuel Miranda and New York Senator Chuck Schumer to crack down on those who use “bots” to quickly, and in bulk, purchase scarce tickets on primary sites to then resell on secondary markets at a mark-up. The story quotes Mr. Miranda saying, “My concern is that our show […]<\/p>\n","protected":false},"author":3,"featured_media":2089,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":true,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[26],"tags":[],"class_list":{"0":"post-2088","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-issues","8":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/www.artsjournal.com\/worth\/wp-content\/uploads\/2016\/08\/robot.jpg","jetpack_shortlink":"https:\/\/wp.me\/p3dIW5-xG","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":2034,"url":"https:\/\/www.artsjournal.com\/worth\/2016\/05\/things-i-do-not-understand-about-the-ticket-resale-debate\/","url_meta":{"origin":2088,"position":0},"title":"Things I do not understand about the ticket-resale debate","author":"Michael Rushton","date":"May 21, 2016","format":false,"excerpt":"The Guardian reports that next week Professor Michael Waterson will release a UK government commissioned report on the regulation of ticket resale. I'm glad to hear it, because it might shed some light on an issue which the press seems to find simple - touts are ripping off consumers and\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"maximum mark-up 57 cents","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2016\/05\/shea-300x72.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":713,"url":"https:\/\/www.artsjournal.com\/worth\/2013\/04\/why-are-tickets-for-rock-concerts-so-expensive\/","url_meta":{"origin":2088,"position":1},"title":"Why are tickets for rock concerts so expensive?","author":"Michael Rushton","date":"April 24, 2013","format":false,"excerpt":"Artsjournal links to a CBC story on the prices of concert tickets: Whether it's Justin Bieber or the Rolling Stones that fans want to see in concert, they'll likely be paying dearly. \"At first, we only spent $350. Then, the next time, we spent $450,\" 16-year-old Bieber fan Cara Corbett\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"play 'fever dog'!","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/04\/almost1-300x203.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":3074,"url":"https:\/\/www.artsjournal.com\/worth\/2024\/09\/should-opera-companies-just-slash-their-ticket-prices\/","url_meta":{"origin":2088,"position":2},"title":"Should opera companies just slash their ticket prices? Updated with responses to comments","author":"Michael Rushton","date":"September 4, 2024","format":false,"excerpt":"The\u00a0Philadelphia Inquirer\u00a0reports that Opera Philadelphia is radically cutting their prices (the article is paywalled, but you get 6 months of the\u00a0Inquirer\u00a0for a buck, which is not a very high wall): In the first 48 hours after unveiling its new \u201cpick your price\u201d ticket program Tuesday morning, Opera Philadelphia sold 5,876\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/09\/image.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/09\/image.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/09\/image.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/09\/image.png?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/09\/image.png?resize=1050%2C600&ssl=1 3x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2024\/09\/image.png?resize=1400%2C800&ssl=1 4x"},"classes":[]},{"id":854,"url":"https:\/\/www.artsjournal.com\/worth\/2013\/06\/the-enduring-mystery-of-scalpers\/","url_meta":{"origin":2088,"position":3},"title":"The enduring mystery of scalpers","author":"Michael Rushton","date":"June 5, 2013","format":false,"excerpt":"I posted re scalpers a few weeks ago. The forthcoming New York Times magazine has a story on ticket resale. It is, well, unsatisfying. The problem at hand is this: if so much money is to be made through ticket resale, why have the artists or concert promoters not done\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"face in the crowd","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2013\/06\/tom-petty-300x298.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":2664,"url":"https:\/\/www.artsjournal.com\/worth\/2021\/05\/do-we-know-how-changing-prices-affects-the-income-diversity-of-audiences\/","url_meta":{"origin":2088,"position":4},"title":"Do we know how changing prices affects the income-diversity of audiences?","author":"Michael Rushton","date":"May 13, 2021","format":false,"excerpt":"In the very first few weeks of Econ 101 students are introduced to the \"demand curve\", relating how changes to the price of a product affect the quantity demanded of the product, all other things held equal. 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Today's New York Times has a piece by Austin Frakt on hospital pricing, and whether and how changes in funding of patients through public sector programs might change hospital charges to privately insured patients. 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