why not sell people the right to sell tickets later at a price they choose?
I'm seeing reports of all these tickets for the India Pakistan world cup semi-final being sold on the black market at several times what their price was...this is probably construed as being "bad" or "wrong" and is deemed illegal.
But it isn't quite so clear to me what exactly is wrong about this. Surely if one is talking about say dal or onions or salt then such behaviour is clearly going to harm a whole lot of people and benefit a select few so on balance this is not very good.
In this case, however, there is a legitimate trade that can be carried out. If some student wants to pay 5000R instead of 250R (the mandated price), well why not let him or her? In this case the entire costs of the exchange are being internalized by the participating parties. The whole reason why a "black" market exists is because re-sale isn't possible. But why prohibit re-sale if the seller and the buyer enter into a trade such that the buyer's value exceeds the seller's cost?
However, there is a potential problem in that this may encourage a few to buy every single ticket and then sell it at an inflated price. As long as it is mandated that every ticket sold is mapped to one and only one individual - i.e two tickets cannot belong to the same individual - I don't quite see the problem here either. Let's say you fine someone who ends up holding on to two tickets, for instance, a monetary equivalent of the earlier price of the ticket. Now, the person who chooses to mass buy will for sure internalize the probable fine, and we will get revenues that are better reflective of the willingness to pay for the ticket.
In this instance, everyone wins - the spectators who have essentially carried out something like an auction and allocated tickets according to willingness to pay; the administrators who will make more money; and the players too because the more passionate fans are in the stadium.
Of course, it would require some knowledge of how tickets are actually sold to see if this is a sensible idea or not.
I amuse myself here; Your amusement is intended but boundedly so
8 comments:
also the inflated price in a black market results mostly because of supply constraint.
when the product was initially being sold, any buyer say would be ready to pay a particular price for it. when it is sold out however, the willingness to pay shoots up suddenly for anyone now who wants to own it. don't know if that makes sense but it's like you expect prices in the black market to be exorbitant.
black markets push the quantity being sold to the extreme margin of almost not being sold (if not at that high price).
random resale would do the same thing. unless the resale is monitored like with airline reservations these days.
well here the supply constraint is fixed by definition - you cannot buy more tickets than seats
and prices are fixed by the admin
so the inflated prices appear to be mostly indicative of value that people have put on the ticket. instead of letting the money go to waste in the black market - or, more likely, into the pockets of some admin people - make this sale legal, so that the money (at least a part of it) can be properly utilized.
you don't get what i'm saying. when the first price is fixed (by the admin) it is a function of the number of seats. but once tickets are 'sold-out', apparent supply in the market is zero. no matter what price. this frees the price any demander would now be ready to pay, if a ticket is available. in other words, now price is unbounded above. that's how a black market inflates price unnaturally and exploits demand ex-post a 'sell-out'. as long as resale is monitored and it puts a cap on price it should be ok. but black market does not have regulation that's why its not ok. that's why airline ticket reselling is doing ok, because the airline itself acts as the mediator (and therefore regulates the price).
sure, the price will incorporate the fact that there isn't any "supply" left, but you can't just charge any price, if you charge too high a price, no one will buy the ticket.
and with the rule that a single individual must have one and only one ticket; if more then he/she must pay the admin the same amount
i'm guessing that totally out of control ticket prices will be ruled out by that.
i.e. the price the ticket owner will charge will be reflective of this constraint - that you have to sell all but one of the tickets you own.
if someone is willing to pay a ridiculous price for a ticket, let them.
this same sort of reasoning cannot hold for more important goods (education, food) though, quite obviously. and it is here I suppose that black marketing really gets black.
to put it in fewer words:
there will be a cap on the price, this cap will be imposed by the fact that the ticket needs to be sold.
don't think i get what you are saying. i get the second bit that there is some cap on price. but this could be really high... and the maybe that's why even black markets have some bargaining. but even this range of bargaining, is too high for a buyer to have considered buying at, before the sell-out.
also there is black marketeering sometimes in food along with hoarding when the apparent supply in the rest of the market is squeezed.
the incentive to put a really high price will be muted once you know you have to sell the ticket; rather than a bargain, an auction procedure would be more useful to settle the "right" price.
there is the fear, I suppose, that let's say one person buys all the seats
before it is known who will play
then that person is going to stand to gain a lot of money, if the match happens to be a popular one
but that person still had to buy all the seats, i.e. take on a big risk, so if he/she gets a big reward, it's due to him/her.
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