WMN: t3_1lvnj6_t1_cc3hy7q

[TITLE]

I think that ticket scalping should be made illegal. CMV

[Homericus]

I hold this view because I don't see how ticket scalping is good for anyone other than the few scalpers trying to make money. The price of a ticket is not going to be lower when scalped (excluding rare overselling) and the increase in price only hurts people. Ticket scalping is just rent extraction that only hurts the consumer trying to purchase tickets as individuals. Since there is only a loss to general utility and no gain in a rent extraction event like ticket scalping, making it illegal makes a lot of sense to me, why shouldn't it be? CMV

[convoces]

I agree that ticket scalping has no or negative value. However, in an attempt to change your view, I would say that adding legislation is not the way to prevent scalping. Basically, the transaction that occurs is usually between the legitimate customer and the performer. Scalping occurs when the scalpers try to make a margin by inserting themselves into the middle. Scalping generally hurts the legit consumer because prices go up, but sometimes it helps the consumer if the scalper overpurchased. This generally helps the performer, since all of the tickets get purchased, but it can hurt the performer if they lose audience due to the scalper taking too much of a cut. Since it's not an absolute good or bad for either the performer or legit consumer, I don't think that this should be regulated by legislation, which is really hard to enforce, and if it's hard to enforce it will not deter scalping. It would also require resources to enforce. However, I do agree that we should solve the problem, since scalpers suck... just not with legislation. This can be done easily by matching identity with the purchaser at the venue, which some performances now do. I believe that this decision should be up to the performer and possibly the venue, with those people knowing themselves and their audience the best so they can decide how to best address the problem (some artists do this already) and does not require legislative action that would probably not be very effective in any case. Hopefully this changes your view!

[Homericus]

[STA-CITE]>This can be done easily by matching identity with the purchaser at the venue, which some performances now do. I believe that this decision should be up to the performer and possibly the venue, with those people knowing themselves and their audience the best so they can decide how to best address the problem (some artists do this already) and does not require legislative action that would probably not be very effective in any case. Hopefully this changes your view! [END-CITE]Actually, this (combined with some other arguments that are talking about why scalping isn't *as bad* as I initially though) did change my view. I really like this more elegant solution vs. legislation which I agree might be unwieldy and hard to enforce. ∆

[convoces]

Awesome! Thanks for the delta! Ironic that my response was downvoted while sort of pseudo-economic explanations regarding supply and demand in a vacuum were upvoted. I don't think that people realize that pricing can change the market and the psychological perception of the performer/audience. If a performer wants to maintain a fanbase that doesn't necessarily have $300 to drop on a ticket and wants to avoid alienating those people or becoming "sell-outs", that decision will defy "underpriced relative to the market" arguments as well as being an incentive for the performer to try and stop scalpers from influencing who can afford to go to their shows. There are many external/irrational factors that affect long-term how a performer and their fanbase interacts that cannot be explained by pure supply/demand curves. It's like all those physics problems that start with "Assume a spherical and uniformly-dense cow/chicken/whatever, ignore the force of air friction, ignore the Coriolis effect, ignore etc etc." Scalpers/consumers/performers are not machine-rational agents immune from cognitive biases and there's more than enough room for irrational behavior in an economic system. This is all sort of tangential to whether we should enact legislation or not. Anywho, nice CMV topic and PM me know if you want to discuss it or other topics more!

[DeltaBot]

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[Xylarax]

[STA-CITE]> Scalping generally hurts the legit consumer because prices go up. [END-CITE]Scalping actually helps the consumer. Consumers could buy tickets from the performer at a lower rate. Presumably there are consumers who would buy tickets from the performer if they were available but don't. Scalpers charge too much, so they get hurt. But there are others who want to go more (as judged by their willingness to pay a higher rate), and those people are helped by scalpers as they buy a ticket from them. I do like your proposed solution. I also think venues providing ticket exchanges (like sports teams are doing now) is also a great way to mitigate the problem.

[convoces]

Sure! My point was that it is actually not easy to determine whether scalpers provide a service in some cases or only leech, so unenforceable or expensive to enforce legislation is probably an overreaction. And yeah venue run ticket exchanges is one example of a solution that isn't legislation.

[Celda]

[STA-CITE]> but it can hurt the performer if they lose audience due to the scalper taking too much of a cut. [END-CITE]How would that happen? If a scalper charges more than the demand, and does not sell tickets, then he would lower the prices rather than lose money. If the scalper charges equal to the demand, and does sell tickets, than the performer does not lose audience.

[convoces]

Scalper charges more than demand. Ends up with a bunch of tickets that he/she can't unload, show starts, empty seats. Or, scalper charges more than demand, certain audience cannot attend over others solely because of high price, become less avid fans. I'm sure these do not happen the majority of the time, but they still happen.

[Celda]

Scalpers would lower the price rather than have unsold tickets and lose more money. Maybe there are some cases where they misjudge and end up with some tickets because it's too late to find a buyer, but those would be the minority - out of self-interest. The second case does not make sense, since assuming the scalper sells all the tickets, then the same number of people are unable to attend regardless of whether scalpers exist or not.

[dekuscrub]

First, what are you banning specifically? It could be really broad (no resale period) or really narrow (no purchase with intent to resell). Maybe no selling for a profit? But then you have the standard price ceiling issues, where the individuals who really really want to buy are screwed. [STA-CITE]>Since there is only a loss to general utility and no gain in a rent extraction event like ticket scalping [END-CITE]Where does the loss come in to play? The loss of the buyer is exactly matched by the gain of the seller. And unless the scalper is intentionally holding back on his inventory to jack up the price, I wouldn't call it rent extraction. The scaler doesn't have market power to abuse, generally.

[Homericus]

[STA-CITE]>First, what are you banning specifically? It could be really broad (no resale period) or really narrow (no purchase with intent to resell). Maybe no selling for a profit? [END-CITE]I'm thinking maybe no purchase with intent to resell. I'm not sure, you bring up a good point. [STA-CITE]>Where does the loss come in to play? The loss of the buyer is exactly matched by the gain of the seller. [END-CITE]This only makes sense to me if the seller was also a small entity. If stubhub buys up all the tickets the second they go on sale, then re-sells them at higher prices, the value of the tickets hasn't changed (i.e. you still get to see the same event with the same ticket) yet the people actually receiving the good end up paying more for it. Adding a middleman like this only seems to decrease the overall utility. [STA-CITE]>And unless the scalper is intentionally holding back on his inventory to jack up the price, I wouldn't call it rent extraction. The scaler doesn't have market power to abuse, generally. [END-CITE]Well, if the scalper isn't creating new wealth, isn't that the definition of rent-seeking, which sure looks like what is going on to me.

[dekuscrub]

[STA-CITE]>Adding a middleman like this only seems to decrease the overall utility. [END-CITE]Still not following. If the buyer pays X extra, the scalper gets X. Utility doesn't decline, it just moves. Also, isn't stubhub just an eBay of sorts? I was under the impression that they didn't buy tickets from venues. [STA-CITE]>Well, if the scalper isn't creating new wealth, isn't that the definition of rent-seeking [END-CITE]Not really. I'd call it speculation. Rent seeking is generally reserved for attempting to alter regulatory structures and such.

[Maehan]

That is not the definition of rent seeking, as scalping tickets doesn't involve any manipulation of the social or regulatory environments. Arbitrage is not automatically rent seeking. And arbitrage of tickets isn't necessarily no value added.

[monkyyy]

The rich will get what they want; would you rather them get it via online or by hiring homeless people to stand in line for them?

[phase_lock]

Morally, the scalper owns the ticket, he/she should be able to do whatever they want with it. Business-wise, it's rent-seeking for sure, but it is in the event-bringer's best interest to not prevent scalping. If the scalper didn't sell the ticket he/she has before the event, that is one less person who might buy food/drink/t-shirts, which are a high margin item for the event-bringer.

[skatastic57]

Ticket scalpers do more than just get in line first to buy all the tickets. In fact with the internet I'm sceptical that scalpers do much of this at all. Often scalpers buy and sell tickets from the public sort of like stub hub except they are a one stop shop. I've bought tickets from scalpers and from private individuals and the scalpers can have better pricing because it's a business to them and they don't have an emotional attachment to the face value. Scalpers often get their tickets from people who have season tickets but don't go to all the games and they provide a service to the season ticket holder in that they'll always buy the excess. The season ticket holder doesn't have to post anything on craigslist and meet with people; they can rid themselves of their tickets with a phone call. Maybe you and your buddies planned to go to a game but 1 or 2 of you couldn't make it. You can either stand on the sidewalk for an hour trying to find someone that needs tickets to get a good price or you can walk up to a scalper, unload your tickets, and go to a bar and get a beer.

[infected_goat]

I JUST saw Drama make the same argument on entourage...

[EricTheHalibut]

Scalping helps some acts like Britney Spears and the like, which have very expensive tickets anyway. The existence of some tickets being sold for ludicrous prices makes people think that the merely excessive prices charged by the venue are not so bad (a bit like "compare" prices in some shops).

[fanningmace]

Every MLB team except for the NYY have a deal with StubHub. Maybe this is because they see the writing on the wall (eg. see scalping as inevitable) and they simply want to control it as best as they can. Or, perhaps, they do benefit from it. The NY Yankees have their own ticket exchange program separate from StubHub, so they clearly feel there is value there.

[Xylarax]

First, depending where you live some laws do already exist. Usually, you are not allowed to sell tickets above face value within xxx feet of the venue. So, I think it sounds like you would like a law being passed not allowing citizens to sell a ticket above face value, but how do we determine what things fall into this category, it gets grey fast. A stock option is a ticket allowing you to buy stock, so a coupon would be a ticket allowing you to buy a product. Let's assume options are different somehow, but what happens to that coupon. Would you not be able to sell it above face value (free). What about a code allowing you to unlock a digital product that you got for free. You have to draw a line somewhere. If that code has less utility to you than 5 dollars, and another person 5 dollars has more utility you should be able to make that trade. As to the value they provide. I agree, it is not much, but they are facilitating the trading of tickets. They are assuming risk (not being able to sell it, or having to sell it at the same price they bought it at thus wasting their time), and in return, they are there for people who both want to buy and sell tickets. They take on risk, and give their time, and are then paid for that service. If people are willing to pay double, then why should we stop them? The only thing losing money is the venue, but they are actually gaining reduced risk. They get to sell out the show early, get the money months before the show happens. There is profit there, as that money can be invested, or used to pay for things they would otherwise have to front the money for. So there are definitely advantages to selling out shows the day of ticket sales. If you are going to get rid of the scalping aspect of ticket sales, I think you need to encourage the venue to charge market value where the show sells out day of (or close to it). We shouldn't restrict ticket buyers to only be diehard fans who wake up early to get tickets. If people are providing a service, and others are paying for it, there isn't a problem.

[1ibertyordeath]

Ticket scalping is good in the sense that it gives the tickets to those who value them the most. Ticket scalping is bad in the since that they can buy out tickets very quickly for certain events, however, normally, where this becomes the issue is when there are already a million people trying to buy them, so they make up a small minority of ticket buyers and it also allows those who weren't able to get them to pay more to get them, hence giving the consumers who want them the most the option to get them which is a good thing. I would rather pay 200 dollars for a pair of tickets to an event that I want to really go to instead of not being able to buy them at all.

[Maehan]

Ticket scalping is good (or at least not immoral), because it allows consumers who lack access to tickets to obtain them in return for money. People are priced out of events all the time, we do not consider this immoral. What is the moral difference between Ticketmaster pricing a concert at $100 a seat, and a scalper pricing a concert at $100 a seat? Either way some people are going to be unable to attend. Now what is the moral difference between ticketmaster selling tickets at $20 sold via a queue involving some time factor, and a scalper selling a ticket for $100, but without a wait? In the first case, you are limiting who can attend by restricting those who lack the time or availability to wait for a ticket. In the second you are limiting those who lack money.

[kabukistar]

Ultimately, ticket scalping reduces the [Consumer Surplus](http://en.wikipedia.org/wiki/Economic_surplus) in the ticket market, which it instead delivers as profit to a third party which has done nothing but hurt ticket consumers to earn it.

[the_snooze]

Scalping is the direct result of tickets being underpriced. It's a market correction that has the effect of reducing demand to meet supply. If an artist priced tickets at the amount that the market would still yield a full house without leaving out anyone willing to pay that amount, then there wouldn't be any scalpers trying to make money off that event.

[kabukistar]

So? It still has an overall negative effect on the market.

[the_snooze]

Can you elaborate more on what "an overall negative effect on the market" means?

[kabukistar]

Scalpers remove [consumer surplus](http://en.wikipedia.org/wiki/Economic_surplus) from the ticket market. In less jargony terms, they take money out of the market and don't give anything back in return.

[the_snooze]

Is that necessarily a bad thing? If anything, consumer surplus is an inefficiency because resources (in this case tickets) are undervalued, leading to unnecessary scarcity. Scalpers bring value to the market by ensuring that everyone willing to pay for a ticket can obtain one.

[kabukistar]

No, consumer surplus does not mean that the tickets are undervalued, and it is not a bad thing. Consumer surplus happens even when a product is sold at the equilibrium price, and the relatively high amounts of consumer and supplier surplus at that point is one of the main reasons why it's considered the social optimum.

[the_snooze]

Good point. Would scalping likely happen if the ticket price were set at the equilibrium?

[kabukistar]

It could. But it would result in scalpers holding some tickets that nobody wants to buy.

[the_snooze]

So if the prices were properly set at or above the equilibrium, there would be little incentive for scalpers to get involved, as they assume a high probability of losing money. If prices were set below equilibrium, then scalpers would have the effect of raising it closer to that value (with the motivating side effect of pocketing the difference), which you mention is considered a socially optimal point. Is that a bad thing? Or am I misunderstanding you?

[kabukistar]

It's the socially optimum point, but a scalper selling at that amount is not the socially optimum. In the ticket market, a scalper functions the same way as a tax, raising the price and extracting money from the market.