The latest EconTalk is a bit off the beaten track. I’m out in California and thought it might be interesting to go the All-Star Game (or at least stand outside the stadium) and interview people about ticket prices and scalping.
The podcast opens with a story about my wife and I getting scalped to say Les Miz, a few months after it opened in 1987. Reminiscing with her about it, we got to talking about why the atmosphere outside a stadium or concert gets so intense as people buy and sell tickets on the street. Part of it is that there are often few substitutes for the pleasure that is being anticipated. Most baseball fans for example rarely get to go to an All-Star Game. There isn’t going to be one every week. And the tickets are fixed. If a lot of people want to go, they don’t expand the stadium. So there’s a lot of potential value there for the serious fan. Even so, there’s a wide distribution of value as well. So even though the ticket on the street is $400, someone might be willing to pay much much more. Of course the scalper is often aware of that. So there’s a dance of negotiation playing against the backdrop of competition from other buyers and sellers.
It just isn’t like most of the other economic transactions we make. It’s nothing like buying a cup of coffee or even going to a regular season baseball game. Unless you go to one a year. Then it’s similar. It’s like buying a cup of coffee if you could only buy one cup a year and you weren’t sure you’d be able to get a cup. You’d really look forward to it and savor it if you got one at a price you liked.