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February 20, 2006
A bizarre argument against ticket scalping: Olympic edition
The Sports Economist links to this NY Times story. Apparently when early sales were lagging, sponsors and national Olympic committees began buying up blocks of tickets to Olympic events. The problem is that those tickets are not being used, and the sponsors are trying to sell them for whatever they can get.
"The tickets have been sold, but maybe the spectators have preferred to go somewhere else," said Mario Pescante, an Italian under secretary of state who is the top government representative to the Games and a member of the International Olympic Committee.
...
Still the problem remains, and it touches on the interests of the sponsors, potential spectators, the scalpers and, ultimately, the organizers of the Games, who are eager for Turin to be seen as a grand success.
The sponsors, looking to recuperate some percentage of the money they have spent for tickets, have unloaded them on ticket brokers and scalpers through connections made over years and multiple Olympics. And starting in the early days of the Games, scalpers spread out around town with their business cards, cellphones and bricks of tickets, some even setting up temporary offices.
But their interests conflicted with two other powerful ones. First, the Turin organizers were having trouble selling tickets, and every one sold by a scalper would in theory subtract from revenue made by sales through the official box office. Second, ticket scalping is, plainly, against the law.
...
But the scalpers say they are providing a public service. Many Italians cannot afford the high prices of the official tickets — figure skating prices, for example, run from about 75 euros to about 293 euros (nearly $90 to more than $350) — and scalpers say they are selling, in most cases, far below the official prices.
In the U.S. selling at below face value is usually allowed except in certain locations (e.g. state property or at the event venue). See this Cato paper for a summary. When economists talk about the potential efficiency gains from allowing scalping, it is usually in the context of allowing the price to rise to eliminate non-economic forms of rationing, like queueing.
Here we have a case where tickets have already been sold once and the organizers want to prevent them from being sold again at below face value to protect their monopoly on selling them at face value (which is above the equilibrium price).
The inefficiency is in the form of excess supply instead of excess demand. Instead of not being able to find a ticket that you can afford, you can't afford a ticket that you can find.
And on another Olympic note, I was right about the U.S./Canada curling outcome. I didn't want to be right, but the U.S. just could not finesse the shots the way Canada could. They will meet again in the medal round. The U.S. proved they can stay with the Canadians, but they have to do more. I don't think you're going to beat Canada by blanking ends and trying to stay even. Canada's only losses have been when they are down in the 8th end. You're not going to beat them in the last two ends.
Posted by William Polley at February 20, 2006 01:21 PM
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Comments
I have watched every American men's curling match, and this was the first time I have seen them truly beaten. There were lucky breaks for both sides, but Canada looked very very good.
Posted by: bob mcmanus at February 20, 2006 08:42 PM