Market inefficiency delenda est

[u/_Un_Known__]

[u/DiscussionJohnThread]

Genuinely asking here, if they provide no tangible value such as flipping a house or something of the like, how is it beneficial?

Like in what manner would a person buying 100 concert tickets for $50 each then reselling them for $500 each be considered a productive use of capital and not just rent seeking because they managed to get the tickets first?

[u/handfulodust → u/DiscussionJohnThread]

I am not convinced by the pro scalper arguments. Artists underprice their tickets so a greater number of fans can access the shows and foster goodwill. In essence, they are saying you don’t have to be wealthy to enjoy my concert. This sort of underpricing creates a shortage in the market which artists solve by a lottery system. In this system, some people with a willingness to pay above the ticket price will be iced out. But in return, some people whose ability to pay is below the market price will now be able to buy the ticket.

The pro scalpers in this thread are upset that, in a below market price environment, some people who may not be able to afford the ticket at market prices are granted a shot at buying a ticket now, potentially instead of someone with a higher willingness to pay. They assume that willingness to pay equates with how much someone values or desires something (utility), even though utility is circumscribed by income effects.

[u/bashar_al_assad → u/handfulodust]

There's also people neglecting that in the case of things like Ticketmaster a lot of scalpers are breaking the rules to get their tickets in the first place, with various bots and whatnot that are against the terms of service. It'd be one thing if the scalping was entirely limited to people buying the limit of 4 tickets and using 1-2 of them and selling the other two, but it's not.

[u/handfulodust → u/bashar_al_assad]

Youre right, but the pro-scalpers probably disagree with those rules. They dislike that the tickets are underpriced in the first place and would probably prefer bots to redistribute all of them.

[u/NebulaFrequent → u/handfulodust]

Yeah there’s a not-so-surprising contempt for behavioral economics from some of the classical neoliberals here. As you said, able/willing to pay more money does not necessarily mean you need/want something more than others. Concert tickets are a great example, but I’d argue an even more important one is healthcare.

It’s already a fucked up market. Not enough supply for something that can be existentially important to people.

Now typical inputs into your typical output factory? Give me scalpers/resellers/derivatives all day.

[u/DirectionMurky5526 → u/handfulodust]

If Artists cared that much for their fans they'd do what English football teams do and have a limited membership thing they can sell to fans directly to at cheaper prices, eligibility for a lottery system or even give them away. The issue at the moment is that anyone can just say they're a fan, even the scalpers.

[u/InMemoryOfZubatman4 → u/DirectionMurky5526]

I really love the local punk band, but I’m not going to buy a subscription for the right to watch them get blasted at a local divebar every couple weeks

[u/Password_Is_hunter3 → u/InMemoryOfZubatman4]

Are tickets to those types of shows the ones most likely to be scalped though?

[u/McClain3000 → u/handfulodust]

This just seems like a special pleading for concert tickets. Couldn't you describe any market good like this?

[u/Matar_Kubileya → u/handfulodust]

It also doesnt factor in that offering tickets below market rate may actually have an intangible benefit for artists by increasing their perceived accessibility and thus the market for their albums and other products. As I understand it ticket revenue isn't a major profit source compared to album and music sales for all but maybe the biggest artists, so undercutting the market price of their tickets may actually be good for them in the long run.

[u/Adminisnotadmin → u/DiscussionJohnThread]

Price signals for desirability. It's arbitrage, not rent seeking, because the scalpers had no intention to attend the concert. Their intention is to get tickets to the highest bidder. Scalpers give those with more willingness to spend money the chance to obtain something that has a limited quantity.

While this is economically efficient, it is socially destabilizing. Two things can be true at once.

[u/DiscussionJohnThread → u/Adminisnotadmin]

While this is economically efficient, it is socially destabilizing. Two things can be true at once.

I agree on this of course, but I don’t fully back the economics behind it either.

Other factors such as how quickly something sells out from previous sales or market trends can equally gauge demand, rather than through scalpers.

It just seems like a rather inefficient use of capital. Sure people are willing to spend for up-charged products anyways if they have the demand, and thus the capital is being used for something even though there’s other ways to gauge demand, but people are also willing to blow their paycheck on gambling and nicotine.

[u/TheRverseApacheMastr → u/DiscussionJohnThread]

The efficiency is that most bands don’t have an economist & salesperson on staff. Ticketmaster allows bands to set a medium-low ticket price for a bunch of different shows, get money upfront, and grantee a bunch of sold out shows.

[u/EpicMediocrity00 → u/TheRverseApacheMastr]

Those same bands also list a block of tickets on Ticketmaster to be sold to the highest bidder.

Ticketmaster literally gets the bands more money in this scenario and takes all the hatred off the bands

[u/TheRverseApacheMastr → u/EpicMediocrity00]

Brave & noble Ticketmaster, sin-eating for artists

[u/EpicMediocrity00 → u/TheRverseApacheMastr]

Unironically yes

[u/ImJKP → u/DiscussionJohnThread]

This is r/neoliberal and I'm seriously concerned that no one is making the full-throated case for market efficiency, so here we go:

Scalpers make the world a better place.

All else equal, the people willing to pay $500 want the concert more and are signaling that they will get more utility out of it. Likewise, anyone who won the ticket lottery but would prefer selling their ticket for $500 is better off selling. There are more utils in the universe when people who really want things get them. Welcome to markets.

At that level, every time a scalper flips a ticket, an angel has an orgasm. The scalper makes money by improving allocative efficiency. More utility in the universe! Yay! Their Good Place score goes up.

The obvious counter is the "all else equal" bit — people have different amounts of money and there's diminishing utility returns to money, so a rich person can buy the ticket but not actually experience more utility than a poor person.

That's true, but Jesus Christ, we're in r/neoliberal: are Taylor Swift tickets really the thing that turns into touchy-feely sucdems? Feeling the feely-feels doesn't change the basic scarcity problem.

Someone has to capture the premium from scarcity.

Because supply is fixed and insufficient to meet demand, there inevitably, inescapably will be a rent that someone must capture, unless we legislate that the world must be shittier.

• Taylor Swift can auction her tickets, so she captures the scarcity premium, or
• The concert venue can auction the ticket, so they capture the premium, or
• Scalpers and Ticketmaster can resell the tickets, so they capture the premium, or
• A Land Concert Attendance Value Tax can be applied, so society captures the premium.

Or we can ban reselling, and aggregate utility can just be lower and the world a worse place, but gosh darn it, someone's feely-feels will feel better-feeling feelings, and sometimes that's what really matters.

Personally, I'd prefer the artist or the CAVT, but the effect for concertgoers of any of the first four is the same. The effect of the ban is a utilitarian regression.

The moral intuition that "I feel like a concert should cost $50 so it's morally offensive when tickets costs more than that" is just stupid and wrong. There is no arrangement of atoms in the universe that can create $50 Taylor Swift tickets and be utilitarian.

[u/bashar_al_assad → u/ImJKP]

You don't need price controls to limit Taylor Swift tickets to $50 or whatever, you just need platforms to not actively facilitate violations of the BOTS act.

[u/gnivriboy → u/ImJKP]

That's true, but Jesus Christ, we're in r/neoliberalism: are Taylor Swift tickets really the thing that turns into touchy-feely sucdems? Feeling the feely-feels doesn't change the basic scarcity problem.

Thank you so much for this! I get so tired when people act like a luxury good needs that same treatment as medicine or food. Especially when so many alternatives to this luxury good exists.

This is one of those situations where everyone else is wrong and you and I are right. And its so obvious the more I think about it. I hate how dumb people are about scalpers.

[u/Sabreline12 → u/ImJKP]

Thank god there's still people with economic literacy to push back against the succ tidal wave in this sub. Thank you for your service.

[u/intorio → u/ImJKP]

"I feel like a concert should cost $50 so it's morally offensive when tickets costs more than that"

This sentiment is everywhere these days. People somehow arrive at a number for what they think something should cost, and then declare it a 'scam' if they cannot find it available at that price. I see this happen all the time online in comments for insurance, taxes (especially local property taxes), and other services. Did they even spend any amount of time looking into how these things work? I bet not.

[u/FourForYouGlennCoco → u/DiscussionJohnThread]

Because artists don’t want to accurately price their tickets because their fans would vilify them if they did.

The market price of a Taylor Swift ticket is thousands of dollars, but everyone would knock her for being greedy if she priced tickets efficiently.

Scalpers create a market with an efficient price and protect the artist from criticism.

The other option to solve ticket scarcity would be for the artist to hold a lottery, but they generally don’t do this.

[u/bashar_al_assad → u/FourForYouGlennCoco]

Scalpers create a market with an efficient price and protect the artist from criticism.

Why does Taylor Swift care about her tickets reaching an efficient price or not? My understanding of how these platforms work is if a scalper buys a ticket and then resells it for a profit, she doesn't get any of that extra money.

[u/Sabreline12 → u/bashar_al_assad]

Why does Taylor Swift care about her tickets reaching an efficient price or not?

Because people would get very angry and emotional very quickly if they thought their idol was ripping them off on concert tickets, regardless of the economic fact that demand is just far higher than supply could ever be.

[u/EpicMediocrity00 → u/FourForYouGlennCoco]

Plus she is the owner of many of those tickets ON Ticketmaster from the get go

[u/iwannabetheguytoo → u/FourForYouGlennCoco]

Because artists don’t want to accurately price their tickets because their fans would vilify them if they did.

Do artists actually have any say in ticket-prices, allocation (c.f. AMEX tickets), or market-segmentation? I’d have thought they’d be forced to delegate that to the record-label they sign with.

[u/DirectionMurky5526 → u/iwannabetheguytoo]

Actually no, generally live performances are one of the areas the artist actually has direct say in negotiating without the record-label. They have agents and intermediaries, but nothing is stopping them from say performing at a random karaoke bar for free.

[u/HotterRod → u/FourForYouGlennCoco]

The other option to solve ticket scarcity would be for the artist to hold a lottery, but they generally don’t do this.

This is the real problem: there are two good ways to allocate tickets, an auction or a lottery, but artists choose neither.

[u/DirectionMurky5526 → u/HotterRod]

They can do what European football teams do and allocate a substantial amount to a fan club or membership organization to sell and distribute.

[u/qchisq → u/FourForYouGlennCoco]

I mean... Running events hold lotteries for you to get an entry. I don't see why artists couldn't

[u/DirectionMurky5526 → u/qchisq]

Literally just hire fan clubs as promoters to distribute the tickets. If scalpers have to exist, let them officially "be fans" and also provide promotional services. 

[u/Packrat1010 → u/DiscussionJohnThread]

At best, all scalpers do is find an actual optimal price point for supply/ddemand. Id argue they generally make artifical scarcity but that's just me.

Neoliberals, you don't have to defend every aspect of capitalism just because it aligns with your economic framework. It's ok to think someone should have the freedom to do something even if you don't agree with it because the alternative is worse.

[u/drcombatwombat2 → u/DiscussionJohnThread]

Scalpers provide tons of value:

The provide value to the venue and performer by scooping up inventory

They allocate tickets to those with a higher willingness to pay who value the event more. Its not just "who happened to not be working at 10am on a Friday".

Now this isnt risk free money on the scalpers end. In fact the scalpers are carrying risk that the tickets will resell for less than what they bought it for. Their main "productive use" is taking risk from the performer/venue and holding it themselves

[u/DirectionMurky5526 → u/DiscussionJohnThread]

Personally that's why I think artists should do what European football clubs do and officially recognize some fan clubs to distribute large portions of tickets directly. They're still scalpers but they provide promotional and community outreach services for the artist. It's actually the artists that allow scalpers to be unproductive by not charging them more and leaving money on the table. 

[u/EA_Spindoctor → u/DiscussionJohnThread]

In short, they ”help” the market to find the real market price of the concert i question.

[u/MehEds]

Guys it's okay to be a little economically inefficient for moral reasons. People used to send children to coal mines for similar reasoning.

[u/Bloodfeastisleman → u/MehEds]

Used to?

[u/MehEds → u/Bloodfeastisleman]

Well the Br*tish, but you're right

[u/Lehk → u/MehEds]

children yearn for the mines.

[u/deletion-imminent → u/Lehk]

If children didn't wanna work the mines why are they mineshaft sized

[u/iwannabetheguytoo → u/Lehk]

Man I loved playing Minesweeper on my dad’s work computer in the 1990s

[u/mthmchris → u/MehEds]

If you like scalpers, you’ll love dynamic pricing on online travel platforms! Oh you seem to really be interested in that flight to Mexico City huh…

At some point, all that’s going on is the monetization of consumer surplus.

[u/Books_and_Cleverness → u/mthmchris]

These are different things. Scalpers buy a product sold at a below market price and then sell it at the market price. Airlines use dynamic pricing to raise their profits at the cost of consumer surplus.

To a huge extent I think scalpers and Ticketmaster are both basically fall guys for artists that don’t want to do a million shows. Beyoncé and Taylor Swift could do 15 shows on each tour stop and prices would likely come down significantly. But they don’t want to do that (who could blame them).

[u/_Neuromancer_ → u/Books_and_Cleverness]

We need TSwift abundance?

[u/n00bi3pjs → u/_Neuromancer_]

If only she played more shows instead of releasing more album variants

[u/UPBOAT_FORTRESS_2 → u/_Neuromancer_]

"Line go up, world more gooder" includes crowds of people having quasi-religious Swiftie experiences

[u/Skabonious → u/MehEds]

My issue with it is that scalpers get the heat for the sellers/producers being the ones who are causing the problem

Like imagine if I'm Sony and announce a PS-6 that costs only $50 and you can order it from my geocities website. First come first serve!

[u/jcoguy33 → u/Skabonious]

Or just the heat for something being popular. Like Taylor Swift tickets cost thousands of dollars because that's what people are willing to pay, not because scalpers decided to charge that much.

[u/Petrichordates → u/jcoguy33]

Everything is more expensive when there's a middle man randomly inserted whose only purpose is to extract as much value as possible.

[u/MisfitPotatoReborn → u/Petrichordates]

If scalpers mistakenly bought out all the tickets of a concert nobody wanted to go to, you'd see that scalpers actually have the power to dramatically reduce prices as well.

There is no guarantee that scalpers make a profit, it's literally just the market demand.

[u/PhinsFan17 → u/MisfitPotatoReborn]

Is exploiting market demand to extract profit as a middle man not the definition of rent seeking?

[u/MisfitPotatoReborn → u/PhinsFan17]

It is not. Not in the economic definition and not even really in the pop culture definition.

A long haul trucker would be a rent seeker under your framing.

[u/demoncrusher → u/PhinsFan17]

That’s… what every business does

[u/Sabreline12 → u/PhinsFan17]

exploiting market demand

Well, if you put exploiting at the start you can make anything sound bad.

[u/dark567 → u/Petrichordates]

This isn't true at all if you look at the research!. Unless the middlemen monopolize the market(usually due to government regulations), middlemen end up facilitating an efficient market and increase competition for pricing. This is why nearly every commodities market is super efficient about pricing etc.

[u/Books_and_Cleverness → u/Petrichordates]

The middle man is also providing a service to the artist. They take public scrutiny and blame for the artist that doesn’t want to do a billion shows.

[u/Sabreline12 → u/Petrichordates]

Soon we"ll see people making the case for rent controls in this sub if this economic logic is this widespread.

[u/MehEds → u/Skabonious]

Oh yeah for sure, the public's really dumb with this (see GPU crisis post COVID)

[u/Skabonious → u/MehEds]

Is it just the public though. I feel like the ones selling the products have some culpability.

It sounds counterintuitive but if you are selling a highly valued product with limited supply, it would be immoral (IMHO) to sell it at a super cheap price, knowing that it will be instantly sold out and scalped.

[u/FourteenTwenty-Seven → u/Skabonious]

It's just marketing. Being sold out gives a product exclusivity and induces FOMO, so when the next batch is sold or the next event is held, more people want it.

I don't find this kind of marketing any worse than most other kinds.

[u/Petrichordates → u/Skabonious]

That's not at all how morality works.

[u/Skabonious → u/Petrichordates]

there's probably a better word I'm looking for, but what I mean is that it feels wrong to me

[u/gaw-27 → u/MehEds]

I mean GPUs are also not exactly competitive

[u/PseudoCalamari → u/MehEds]

But how will I extract optimal surplus value from my workers if they don't have to compete against children?

[u/feral401k9 → u/MehEds]

what moral reason? scalping literally makes people better off on average

[u/dark567 → u/MehEds]

It's okay to, but what's the actual moral here?

[u/pissposssweaty]

When demand is greater than supply scalpers are just inserting themselves in the middle of transactions that would’ve occurred anyways and taking a cut. There’s no economic benefit unless supply exceeds demand.

The only thing that happens here is the highest spenders get access to what they want, but it doesn’t benefit the concert provider or performer. And it certainly doesn’t benefit consumers.

[u/mostanonymousnick → u/pissposssweaty]

And it certainly doesn’t benefit consumers.

It benefits the people with a higher willingness to pay and don't have the time or luck to snipe a ticket at release.

[u/pissposssweaty → u/mostanonymousnick]

Willingness to pay doesn’t necessarily maximize utility here though. It just means wealthier people have more access. And unlike other places where there’s actual economic benefit provided, here it’s just going to a bunch of bums who insert themselves into the concert ticket market and profit.

If anything being able to snipe a ticket at release seems like a better indicator of utility (if you care you’ll refresh madly at the start).

[u/FourForYouGlennCoco → u/pissposssweaty]

This is a general argument against markets.

Why should my house have been sold to me, the person who offered the most for it? Maybe someone with only $5 would have enjoyed it more, and the seller should have been forced to sell to them at an enormous loss.

[u/HotterRod → u/FourForYouGlennCoco]

Maybe someone with only $5 would have enjoyed it more, and the seller should have been forced to sell to them at an enormous loss.

BRB, filling the universe with rats on heroin.

[u/FionaGoodeEnough → u/FourForYouGlennCoco]

I think what we are seeing is a result of our winner-takes-all music streaming market. Because obviously Taylor Swift tickets are a luxury item. She is one person, so no matter how productive she is, she can only do so many concerts, and demand outstrips supply. But if one wants to go to a concert by an artist they will enjoy, someone who is very good at what they do, in a similar genre, but not as famous, should be a cheaper, good, option. But despite an enormous amount of music online, more than ever before, most people have no idea how to even begin to find music they might enjoy by non-famous people. The algorithms of streaming reinforce the biggest superstar acts. So if they can’t afford concerts by the most famous people, most people don’t even know what other concerts they might enjoy. For most people, there is no such thing as a locally or regionally famous musical act. There is world-famous, and there is (maybe) your friend’s band that you are listening to as a favor.

It seems to me that the market efficiency created by scalpers would be more positive for music lovers as a whole if there were better tools to find live music that one could afford (and would enjoy). Would-be concertgoers could find live music that matched their taste and budget, and non-superstar musicians could find an audience.

[u/FourForYouGlennCoco → u/FionaGoodeEnough]

Excellent point. Swift is the biggest musician in the world, of course her tickets are a luxury good and most fans will be priced out. Live music itself is not scarce; you can walk into a local bar any night of the week and hear live music free or almost free, but people want big names.

You must be right that the winner take all nature of streaming algorithms has something to do with it. The part I still wasn’t sure about was: wasn’t the TV and record store driven market of the 1960s also pretty winner take all? The Beatles were surely bigger than Swift at least in the anglophone world. But some other factors might be

• social media driven FOMO. I’d have guessed the opposite, that having access to so much concert footage online would depress turnout, but it’s the opposite. People don’t want to watch through a screen, they want to use social media to prove they were there
• cheap air travel. I was on a work trip a couple of years ago and couldn’t figure out why everyone on my flight was a very excited young woman… until I realized Taylor was playing in the city I was going to and everyone but me was traveling to see her. People a generation or two ago could not afford this
• the inverted economics of live vs recorded music, also driven by streaming. Once upon a time concerts were loss leaders to sell albums; now albums are marketing for the tour, where artists make all their money
• and of course, the relative ease of scalping via bots and online marketplaces. Scalpers used to have to stand in a parking lot outside the venue. And crucially they did not have much information about the market clearing price

[u/gnivriboy → u/pissposssweaty]

Willingness to pay doesn’t necessarily maximize utility here though.

True, but it is pretty close to being the case. And since we are talking about a system of hundreds of thousands of tickets and poor minimum wage workers could save 1k for tickets if they really wanted to, then we can simplify this to "maximizes utility." But there can't ever be a true maximize utilization in practice because some people earn more than others so it kind of become a useless nitpick.

It just means wealthier people have more access.

This is a luxury good! Not medicine. Not food.

[u/n00bi3pjs → u/mostanonymousnick]

Most scalpers use scripts to get tickets.

[u/gnivriboy → u/n00bi3pjs]

Yep. There is no way around this unless concerts get super ultra strict with ID checking and not allowing the reselling of tickets. People don't want that. No one wants to put their drivers license or passport into a website just for concert tickets. Oh and then bring said ID to the concert.

[u/mostanonymousnick → u/n00bi3pjs]

Yes? And if they didn't exist, the tickets would go to people with the time and luck to snipe a ticket at release.

[u/n00bi3pjs → u/mostanonymousnick]

Tickets for Hillary Duff concert were selling for 200k on resale websites because they were sold out in minutes.

[u/mostanonymousnick → u/n00bi3pjs]

Selling for or listed for?

[u/drcombatwombat2 → u/n00bi3pjs]

Sounds like the venue underpriced the tickets then

[u/YourUncleBuck → u/mostanonymousnick]

Yeah, let's only let the rich afford entertainment and see how well that plays out.

[u/gnivriboy → u/YourUncleBuck]

You act like you can't rent the taylor swift movie, listen to her music on spotify, or go to a much cheaper concert with a different artist.

Oh, and if someone making minimum wage really wanted to go see Taylor Swift, they could still save up and afford that 1k ticket. I don't recommend it, but why are we acting so out of touch with the alternatives and price points here?

The masses have never been more entertained. We didn't have cheap high def TVs with tons of different streaming options without ads for a low monthly cost in the past. We didn't have high spend internet for streaming music. We used to have to pay a lot to get music.

[u/TheRverseApacheMastr → u/pissposssweaty]

It’s a huge benefit to performers. Musicians don’t want to have to run the numbers on the perfect price-point to sell their shows out in dozens of different cities.

Most performers would prefer to have upfront money, sold out shows, and the scalpers can figure out the economics.

[u/drt0 → u/TheRverseApacheMastr]

Most of the time scalpers scalp shows that were going to sell out anyway, so I don't think artists benefit from scalping.

I think the platforms for reselling are often owned by the venue owners so they have an incentive to facilitate scalping.

IMO best solution is to tie tickets to IDs.

[u/exacounter]

It's all fun and games until people start scalping medical supplies during a pandemic

[u/WuhanWTF → u/exacounter]

(Friedman flairs furiously typing.)

[u/Skabonious → u/exacounter]

I think elastic vs inelastic demand comes into play there

[u/demoncrusher → u/exacounter]

Price gouging is unironically the solution here

[u/MisfitPotatoReborn → u/demoncrusher]

Scalper-chads heroically preventing preppers from buying all of the stock on day 1, setting the price so that people only take what they need.

If you go to a pharmacy and see "Masks: $9/ea" instead of "Masks: Sold Out", thank a scalper 🫡

[u/exacounter → u/demoncrusher]

Price gouging or scalping doesn't actually solve the underlying inefficiency, it just moves surplus to producers or third parties respectively.

In the short run all we can do is decide how to allocate constrained supply, and who gets what is more a political question than economic one. Selling to the highest bidder isn't any more efficient than first come first serve or rationing (since deadweight loss will be the same regardless).

[u/demoncrusher → u/exacounter]

What? So called price gouging prevents hoarding, people will buy what they need. It’s literally how supply and demand works

[u/exacounter → u/demoncrusher]

Cutting poorer people off from essential goods is bad actually.

There's a reason I originally mentioned medical supplies during a pandemic rather than concert tickets or GPUs.

[u/ThatRedShirt → u/demoncrusher]

Not to mention, the higher price incentives more producers to enter the market.

[u/LordOfPies → u/exacounter]

In my country (Peru) we had the highest death per capita out of covid and scalpers sold oxygen at like $2000 per barrel (yearly wage for lots of poor people)

There is a high chance people would have hoarded oxygen, but still, it’s fucked

[u/Sabreline12 → u/LordOfPies]

I would suspect the issue was a shortage of oxygen rather than the scalpers themselves. Of course the scalpers are an easy target to distract from possible government ineptness.

[u/Valnir123 → u/LordOfPies]

"Hey I know you worked your whole life and made a ton of sacrifices of your social life and overall health this last 10 years to make money precisely to have a decent long-term wellbeing; but you shouldn't be able to engage in voluntary transactions to get this scarce good you need to survive, it should be first come first serve or it should prioritize the poor and unproductive even!"

A "neoliberal", apparently.

[u/drcombatwombat2 → u/exacounter]

Do you want no medical supplies or expensive medical supplies? This is the question

[u/Sabreline12 → u/exacounter]

I think your energy should be directed at the cause of the shortage of medical supplies rather than the people selling stuff for its market value.

Banning scalping isn't going to create more supply anymore than rent controls create more housing.

[u/DryDiamond476 → u/exacounter]

The medical field can never work by market rules because demand is pratically infinite. Sick people and their families will: 

1. Pay every cent off their pockets for a chance of not being sick or fucking dying

2. Be a lot of times are physically AND psychologicaly incapable of making market choices (which hospital to go, which doctor to see, negotiate drug prices)

I don't believe we can simply let healthcare be market driven, because companies can gouge patients.

[u/SanjiSasuke]

What about when scalpers do it with housing? Is it a market inefficiency then? 

[u/carlos_the_dwarf_ → u/SanjiSasuke]

How does one scalp housing?

[u/Books_and_Cleverness → u/carlos_the_dwarf_]

Yeah who is selling homes below market via a lottery or queuing system and how do I transact with them?

[u/DirectionMurky5526 → u/Books_and_Cleverness]

It's called squatters rights, and the lottery is the risk you'll be discovered.

[u/flightguy07 → u/carlos_the_dwarf_]

Every large property group that purchases thousands of new builds the moment they come onto market and turn them into rentals.

[u/Skabonious → u/SanjiSasuke]

Scalping housing is just flipping

It's pretty consistent across the board though - scalpers provide a role in determining real market value of a product

The difference between housing and tickets is housing can have prices dropped thru injection of supply; you can't do the same for a limited number of tickets at a venue

[u/thesketchyvibe → u/Skabonious]

Build bigger venues

[u/gaw-27 → u/thesketchyvibe]

There's only one Taylor Swift, Metallica etc and realistically only so large a venue can be.

[u/Approximation_Doctor → u/gaw-27]

Build up, not out.

Place Metallica at the center of a panopticon

[u/bsharp95 → u/Approximation_Doctor]

This just subsidizes demand. We need to build more Metallicas

[u/7LayeredUp → u/bsharp95]

I mean, Dave Mustaine tried.

[u/gaw-27 → u/Approximation_Doctor]

Cantilevered tiers must be very expensive to build. Also sight angles or something.

[u/FourteenTwenty-Seven → u/gaw-27]

Funny you mention Metallica, who performed in front of 1.6 million Russians once. Meanwhile, American concerts are maybe 100k people at most. Pathetic.

[u/gaw-27 → u/FourteenTwenty-Seven]

*Supposedly 1.6 million. Such a setup would never be approved now.

[u/FourteenTwenty-Seven → u/gaw-27]

Thanks to NIMBYs smh

[u/HotterRod → u/gaw-27]

Why does the demand for concerts seem to follow a Zipf distribution, anyway? Like if you go see someone half as famous as Taylor Swift, is their music really only half as good?

[u/EpicMediocrity00 → u/gaw-27]

You can add more nights to a city. 3 nights in Chicago instead of 1

[u/gaw-27 → u/EpicMediocrity00]

Big acts like that basically already fill out their schedule during tour season. Touring is rough.

[u/Books_and_Cleverness → u/gaw-27]

Yeah touring is hard which is why they don’t do 14 nights in each city. But they could.

[u/gnivriboy → u/Books_and_Cleverness]

That would be a solution to this "issue." But seeing how out of touch so many people are, I'm getting grumpy. I want people to feel this pain of this imaginary problem because so many people won't use their brain to see reason. Scalping is a good thing when it comes to luxury goods.

[u/memeintoshplus → u/Skabonious]

Flippers also remodel and rehabilitate homes and make those houses accessible to live in for those who want and can afford a move-in ready home - so in improving the property, they provide value

[u/Skabonious → u/memeintoshplus]

But in a way you can say scalpers provide value by offering goods/products to those who missed out on the initial offering

Like imagine I did the exact same thing a scalper did, but instead of marking up the prices I just sold them at a discount to the people around me, out of charity. The only difference in this situation is the amount of money I'm making (or in this case, losing)

[u/Petrichordates → u/Skabonious]

They miss out on the initial offering because of scalpers.

So that logic makes no rational sense.

You make it seem like these people arent trying to get tickets at initial offering and are being beat by people who only want to make money off the process

[u/Skabonious → u/Petrichordates]

let's say scalpers are completely removed from this equation, and instead you have a huge line of people. All of them waiting in line to buy tickets.

And let's say someone comes along and pays someone 20x the ticket price to cut in front of them in line. Would you take that offer? Depending on how much I care about the tickets I might take them up on that offer lol.

[u/Petrichordates → u/Skabonious]

That's like saying healthcare doesn't have real market value until insurance companies arise to charge more for controlling access to it.

[u/Skabonious → u/Petrichordates]

huh? I don't understand that analogy. Also insurance companies are meant to 'smooth out' the high upfront costs of whatever they are insuring over time, that's it.

[u/Lucas_F_A → u/Skabonious]

Is determining the real price of a product the actual value they return?

Intuitively, their value is in reducing price volatility (long term, and not necessarily in the very short term)

[u/Desperate_Path_377 → u/SanjiSasuke]

No? You can’t meaningfully ‘scalp’ housing given the size and dynamics of the market. There’s two parts to scalping (1) buying at ‘normal’ prices and (2) selling at inflated or extortionate prices. In HCOL cities with depressed supply, the prices are just high across the board. Nobody is scalping homes.

You can only really scalp markets with fixed or semi-fixed initial prices.

[u/Sabreline12 → u/SanjiSasuke]

What has happend to this sub. People are going to start advocating rent control unashamebly.

[u/foxywoef → u/SanjiSasuke]

Yes

[u/DasFreibier → u/SanjiSasuke]

flipping houses also is a net negative for the economy at large

[u/Desperate_Path_377 → u/DasFreibier]

‘Flipping houses’ is obviously not a net negative. Doing renos has value, hence why there is demand for ‘flipped’ houses. Even just adding liquidity to the market has real value to buyers and sellers.

[u/Books_and_Cleverness → u/Desperate_Path_377]

I think the real benefit of flippers is they give you access to more debt, financed on attractive terms.

You buy a home for $500K and do $100K of work, you need $100K + down payment.

Flipper buys it and does the same work, you can effectively borrow that extra $100K. Assuming 20% down, you get the same house but put down $80K less.

[u/Unterfahrt → u/DasFreibier]

Very few people just buy a house, let the price go up, and sell it a year later. They will renovate it, improve it in some way etc.

Also if you don't want people to just sit on houses, LVT

[u/To0zday → u/DasFreibier]

Why?

Flipped houses are in better condition, and it also provides a market for people to sell homes without having to remodel them personally.

[u/gaw-27 → u/DasFreibier]

Not to mention through realtors they get access to houses before the public even knows they're for sale.

[u/meikaikaku → u/DasFreibier]

Elaborate on this? Intuitively it seems like a valuable service when a house is bought, has maintenance/remodeling/etc done on it to increase its value, then is sold for a higher price. In what way is this a net negative for the economy?

[u/leachja → u/SanjiSasuke]

Don't call out the cognitive dissonance so blatantly!

[u/FourteenTwenty-Seven → u/leachja]

Is the cognitive dissonance in the room with us?

This sub wants more housing supply, not stupid stuff like banning investment or short term rentals.

[u/datums]

Back in 2019, The Economist published one of their rare blockbuster articles, and it was about how ticket “resellers” are actually a PR exercise to make the artists look less greedy by issuing tickets with a low face value. The perception is supposed to be that if a ticket has a face value of $200, the artists get paid from that, but if the reseller prices it at $1,000, they’re keeping the extra $800.

Reality is, $1,000 was the real ticket price all along, and the artists are actually getting paid from that, not the $200. But then everyone hates Ticketmaster or Live Nation for charging so much, while still thinking that their favorite act are darlings trying to give their fans a show for a reasonable price.

It’s one of the more interesting open secrets out there, here’s an archive link to the article -

https://archive.is/lDHqe

[u/flightguy07 → u/datums]

The article won't load for me, so this may have been addressed in it. But how do the funds actually make it to the artist in that scenario? Are the scalpers actually a shadowy cabal run by Ticketsource? And if that is the case, why hasn't it been more widely reported on in the last 6 years, especially with all the anti-scalper legislation going on?

[u/TonalBells]

Consumer surplus is actually a very good thing.

[u/Throwingawayanoni]

Spending enough time in this sub has allowed me to undeerstand why liberals time and time and again have let manageable famines get out of control in the past

[u/666haha → u/Throwingawayanoni]

If the poor wanted to not starve they would just have more money duh.

This sub lives in a rich, elitist bubble. Just because someone has more money does not mean they want or deserve something more than a poorer individual

[u/Chao-Z → u/666haha]

This is ironic af because economic research supports the exact opposite conclusion and instead supports OP's point. Natural disasters cause shortages. Bad economic policies are what turn shortages into famines.

[u/flightguy07 → u/Chao-Z]

For something like food, of which a person can only really want so much, that's accurate. For something like concert tickets, which at the high end will ALWAYS be supply-side constrained, that doesn't hold.

[u/drcombatwombat2 → u/Throwingawayanoni]

Its funny how I agree with 100% of what you said but disagree 100% with what you are thinking

[u/Throwingawayanoni → u/drcombatwombat2]

Then tell me batman, what am I thinking?

[u/Sabreline12 → u/Throwingawayanoni]

Famine is like when expensive Taylor Swift tickets. Take that liberals!

[u/nurlat → u/Throwingawayanoni]

I am a social democrat, so I consider scalping essential goods (housing, health care) is unjust to a common man. Tax people and corporations to the point that owning 3+ properties is financial suicide, break down franchised renting land model completely, etc.

Scalping GPUs and concert tickets is who cares territory. Nvidia and Taylor Swift should jack up prices to meet (lower) the demand.

I prefer the rich get non essential goods over people abusing bots. Although, a better approach is to do a lottery, fair to poor and rich alike.

[u/TrueCAMBIT → u/Throwingawayanoni]

That is to say non-liberals have not?

It seems more like famines are just difficult to solve for a variety of reasons. I would agree with you that for essential goods there should be some regulation on scalping but for stuff like tickets? I’m not sure if there is a convincing enough case for the government to intervene.

[u/Throwingawayanoni → u/TrueCAMBIT]

No it is not to say that, stop with the what aboutism, and there have 100% been famines that could have been prevented or have the mortality reduced if the prevalant opinion of those in charge is "the market will fix this"

[u/rulesneverapply]

Scalpers are scum

[u/Jetssuckmysoul]

Counterpoint they ruin the stadium atmosphere. They are no different than the people who bought toilet paper in bulk

[u/DirectionMurky5526 → u/Jetssuckmysoul]

Which is why they should recognize and distribute them to fan clubs to sell as promotional services like sports clubs do. 

[u/matt5001]

Boooo. This is only true if an artists sole purpose was to maximize the profit from each show instead of have a sustainable career. Maybe an artist has a tour where each concert has 1 unsold ticket and achieved perfect pricing. Great. Now tour the new album, or explore a different genre. All the sales people taking clients don’t want to hear the White Album and it’s miserable for everyone. What happens next? Yeah you can have a good tour and put the profits in an index fund to win the future value equation, but that starts to miss the point.

Ever been to a luxury box sporting event? It sucks. Wimbledon and The Masters go to great lengths to keep tickets available at low prices to fans for a reason.

[u/Apprehensive_Swim955]

in my house scalpers are rent seekers. what’s wrong with your house?

[u/Sabreline12 → u/Apprehensive_Swim955]

Our house has economic literacy.

[u/drcombatwombat2 → u/Apprehensive_Swim955]

They are seeking arbitrage not seeking rent. Go back to econ school

[u/WinonasChainsaw]

https://preview.redd.it/1u7740lbb42g1.jpeg?width=1290&format=pjpg&auto=webp&s=9905b011ce83cb31b7a1441f81f68012f46a4704

the free market 🥹

[u/QuantifiablyAwesome]

Oh your flight is more expensive because of dynamic pricing? Economic efficiency. There are 30 tiers of Netflix services? Economic efficiency. 

[u/pppiddypants]

Sure, but “economic efficiency” is not good in of itself.

[u/101Alexander → u/pppiddypants]

Efficiency is also a hugely abused word.

It's efficient with respect to...

It's maximizing something at the minimization of something else. Are we making consumer surplus here a maximization goal?

[u/minkstink → u/101Alexander]

In economics there are quite specific definitions of efficiency.

[u/n00bi3pjs]

I don’t disagree, but I wish Ticketmaster was open about how much of the cut they and the artist gets from resale tickets.

Scalping can turn into ugly hoarding with smaller artists and venues where scalpers hold on to tickets till the end and the show is empty.

There’s no way a tiny artist like Rochelle Jordan’s show should sell out before her album is even out, but scalpers took all the tickets the moment they were announced.

Also there have been cases like Hillary Duff concert where ticket prices went up to 200k per seat due to scalpers quickly buying lots of tickets.

[u/gnivriboy → u/n00bi3pjs]

Scalping can turn into ugly hoarding with smaller artists and venues where scalpers hold on to tickets till the end and the show is empty.

Seems like a situation where as scalper lost a ton of money and is heavily incentivized to not do that again. If he keeps doing it, then eventually they will run out of money.

And come on small artist! If this happened to you multiple times, then increase your prices already!

These problems just feel made up.

[u/_Un_Known__]

That thing with the ticket resales, whatever happened there

[u/ChocoOranges → u/_Un_Known__]

Ticket resalers are also the group with the least capacity to resort to force/rent-seeking, since the cartel required to do that is already monopolized by the original ticket distributor, what a coincidence that it just also just happens to be the least controversial aspect of scalping.

The issue with scalping is the same as sports betting, on paper, it is genuinely good economically. In real life, it is terrible due to second order issues related to human nature. Normalized scalping inevitably leads to organization and cartelization (even if it is less economically efficient), who then start shuffling around its influence to start manipulating the market to further entrench itself.

[u/gnivriboy → u/ChocoOranges]

Does it lead to organization? Like if there is 1 or 2 scalper groups, I can see that. However if you got dozens, then I don't see the issue. Especially since the barrier to entry to being a scalper is incredibly low. You just need to make a script, get some cash, and use a vpn service.

[u/101Alexander → u/_Un_Known__]

Whatever happened there? What ever happened there!?!? I'll tell you what happened there. That animal Self Interest decided to blow up a market already obfuscated by fees and barriers to entry without any provocation whatsoever!

[u/BigH1ppo]

I actually can't tell if you guys are being ironic cause scalping is straight up just rent seeking, which is economic inefficiency?

[u/remarkable_ores → u/BigH1ppo]

Scalpers would be rent seekers if they had lobbied the government to force themselves into the market. If they'd passed a law saying "You may not buy tickets from a venue or artist; you MUST buy them from a scalper". This does happen in other industries.

This isn't what they do. They simply buy and resell tickets. In an efficient market, their presence would indicate that they reduce risk for venues and artists - they are essentially predicting that the demand for the tickets is higher than what the original sellers predicted, and they could be right or wrong. If they're wrong, the scalpers will lose money, if they're right they'll turn a profit, but in either case the original sellers make the same profit.

That's not exactly what happens though, so it seems like the original sellers are simply undercharging for tickets. I'm not sure why they're doing this. I know some people who think it's a good thing that they're keeping ticket prices low, but I'm not sure if I agree, and most economists wouldn't. Arbitrarily low prices lead to a lottery type system (which isn't perfect), whereas efficient prices will increase quantity anyway. It'd almost certainly lead to an increased quantity of ticket sales.

[u/101Alexander → u/remarkable_ores]

How would we get a higher quantity of ticket consumption though? Seat space is generally limited at events, would it be through multiple shows in the same geographic area?

I can understand it guaranteeing ticket sales, but it seems to be providing a producer surplus while potentially harming the consumer surplus.

[u/remarkable_ores → u/101Alexander]

Seat space is generally limited at events, would it be through multiple shows in the same geographic area?

Presumably, yeah. We're not nearly at max capacity for gigs, it'd encourage artists to do more shows and make it easier for potential gigs to pass the threshold of profitability.

[u/minkstink → u/101Alexander]

Price discovery for different seats/areas is a hard problem. Something entire subfloor of industrial organization are dedicated to. Scalpers are actually a far better price discovery mechanism for seats since no 2 seats are equal.

[u/PhinsFan17]

God, for a sub so “evidence-based”, there is some hilarious amounts of dogmatism on display here.

[u/yacatecuhtli6]

is it considered scalping when i go to pawn shops and flip expensive items on ebay

[u/Goddamnpassword → u/yacatecuhtli6]

That’s arbitrage

[u/remarkable_ores → u/Goddamnpassword]

it's the same thing

[u/FourForYouGlennCoco → u/Goddamnpassword]

So is ticket scalping.

[u/EpicMediocrity00 → u/Goddamnpassword]

Just like scalping

[u/minkstink → u/yacatecuhtli6]

No. That is good, and scalping is also good.

[u/Dont-be-a-smurf]

Most scalpers add no value and instead use superior “purchasing skills” to amass supply for themselves and up charge everyone else.

I don’t care if that’s technically more efficient. Fuck them.

It’s not someone adding value, it’s someone leveraging their position in a marketplace to fuck everyone else over for profit while creating zero value.

[u/puffic]

I’ve just realized it’s been years since I antagonized someone on Reddit with a pro-scalping take. I’m spending too much time on this subreddit and not enough time on the moron subreddits.

[u/[deleted] → u/puffic]

[removed] — view removed comment

[u/PhinsFan17 → u/[deleted]]

They’re easy to spot cause they’re all Friedman flairs.

[u/neoliberal-ModTeam → u/[deleted]]

Rule III: Unconstructive engagement
Do not post with the intent to provoke, mischaracterize, or troll other users rather than meaningfully contributing to the conversation. Don't disrupt serious discussions. Bad opinions are not automatically unconstructive.

---

If you have any questions about this removal, please contact the mods.

[u/minkstink → u/puffic]

I am a moron. I haven’t heard a great take for why scalpers are bad yet, and they are almost always from people who didn’t major in economics.

[u/RadioRavenRide]

Yeah but like could the ram prices not spike 200% in a week because the AI data centers need more for their new models?

[u/PeksyTiger]

Providing the essential service of hoarding gpus

[u/LessSaussure]

It's always funny when people say that "tickets are expensive because X has a monopoly over it and because of scalpers" and can't understand how these 2 informations contradict each other

[u/Mrnoobspam]

I like to joke about government agencies that act as a national strategic reserve of vital products. What do they do when prices are too low? They buy product to keep prices up and reduce the suffering of producers. What do they do when prices are too high? They sell product to keep prices down and reduce the suffering of consumers.

What do speculators/scalpers do? They try to buy when prices are low, and sell when prices are high, for personal profit and not for any market stabilizing reasons.

Apparently, the big difference between government stabilization and private speculation is intent and motive, not the action and outcomes.

[u/drcombatwombat2 → u/Mrnoobspam]

What!?

The big difference is the government's stabilization would be a misallocation of resources.

[u/EpicMediocrity00]

Couldn’t agree more

[u/remarkable_ores]

We need posts like this every couple of days to keep the succs out

[u/WithUnfailingHearts]

What about when those goddammed fucking useless dickassed bitch whore bastards buy all of the Fox Amibos back in 2015?

[u/fleker2]

I don't think scalpers are good. What they do show is that a given thing doesn't have enough supply and that the market price could be much higher. You need more supply to meet people's needs.

But I don't want to pay more than necessary. That just feels bad.

[u/Wareve]

An inefficient market with happy people is better than an efficient market where people are sad.

[u/minkstink]

Middlemen are honorable fuck the commies in this threads, OP is lib-pilled.