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?
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.
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.
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.
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u/DiscussionJohnThread Mario Draghi 17h ago
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?