Re: Scalping

>Indeed, scalpers perform a great public service, for which they 
>naturally receive a payment. When the tickets go on sale, they get 
>sold to anyone who calls and has the cash. These people may not be the 
>biggest fans, or the ones most desperate for the tickets. The scalper 
>market creates a way for the tickets to get into the hands of the most 
>committed fans. 
 
First of all, scalpers do not play by the same rules as everyone else. 
Anyone familiar with ticket sales in New York knows that there's a lot of
corruption among venue and TM employees and management, and that a lot of
prime seats are never made available to the general public.  Just check out
the article in Tuesday's NY Times -- apparently Hootie and the Blowfish
have decided not to honor tickets in the first ten rows at their Jones
Beach concert because the discovered that these tickets were "held back" by
someone at the venue in violation of their performance contract.  Take a
wild guess at who these tickets were set aside for.   
 
Second, you assume that the most committed fans are the ones prepared to
spend the most money on a ticket.   I'd like to hear you explain why this
is the case. 
 
>This is how a market system operates, and it seems like a good 
>thing to me. If Ray doesn't want to pay for his tickets, that is his 
>choice. But a lot of people on this list have demonstrated that they 
>would rather pay the money than do without the tickets. If there were 
>no scalpers to even things out, the results of the first round (i.e. 
>calling Ticket Master on the phone) would be the final result, and 
>those who didn't get tickets that way would be SOL. 
I agree that scalping is driven by market forces.  Put simply, there would
be no scalping if tickets were originally sold at the prevailing market
price.  But the market system is hardly sacred -- market principles are
routinely compromised in order to further other, competing values.  Why
should ticket sales be any different?   
 
But even when analyzed from purely a market standpoint, scalping has some
serious problems.  First of all, scalping violates free market principles
in that scalpers have special access to tickets.  Second, scalping is
arguably redundant.  The "great public service" that ticket scalpers
provide is one already being provided (purportedly) by Ticketmaster at a
substantial charge.  Scalpers do not compete directly against Ticketmaster,
they simply add an additional layer of complexity and administrative
expense.  Third, scalpers tend to prefer monopoly pricing (which is
possible through scalping cartels) over true market pricing  (i.e., the
price at which supply equals demand) -- their goal, after all, is to
maximize their profit, not to get tickets into the hands of every fan who
wants one.  How many times have you seen scalpers at a concert offering to
buy up extra tickets?  If you think the scalper expects to resell the
ticket, guess again.  Many times, scalpers simply want to get rid of any
potential competition, which allows them to drive up the prices on the
tickets they already have.  Price gouging may bring scalpers a healthy
profit, but it results in there being empy seats at "sold out" shows --
something that shouldn't occur in an efficient market.