Scalping the Scalper

[LightningRod]

Greed is apparently the same as pornography - we know it when we see it.

Greed's Saving Graces

In the secondary market for tickets to entertainment events, an arena of people sometimes called scalpers, greed exists. So everyone knows that government regulation is required. Everyone except David Harrington, a Kenyon College economist. Writing in Regulation quarterly, he argues that deregulated markets punish greed. Markets know it when they see it.
Studying the Internet site Stubhub, which is owned by eBay, Harrington monitored the secondary market in Ohio State University football tickets for the Oct. 25, 2008, game against Penn State that was attended by a stadium record crowd of 105,711. Stubhub acts as a broker, charging 15 percent from buyers and 10 percent from sellers, who can charge whatever they choose. Generally, a ticket's value depends on the seat's location -- the lower in the stadium and the closer to the 50-yard line the better.
Harrington collected two sets of information, one on Oct. 13, 12 days before the game, the other on Oct. 21, four days before. On Oct. 13 there were 346 sellers offering 682 tickets. Eight days later, 411 sellers were offering 845 tickets. In the interval, Ohio State beat Michigan State and undefeated Penn State beat Michigan, intensifying fans' interest in the game.
Yet the average price of the tickets offered declined from $359 to $304. This was partly because the quality (seat location) of the remaining tickets declined. Also the number of selling days was becoming smaller. Seats at entertainment events are, like airline seats, a perishable inventory: When the plane takes off, or the game begins, the value of an unsold ticket becomes zero.
A greedy seller -- one who priced his tickets too high -- was less likely than other sellers were to sell them two weeks before the game. Hence he had to resort to much deeper discounts than others did as game day, and the potential worthlessness of his assets, drew near. The larger the number of seats available in the secondary market, and the more transparent that market is, thanks to the Internet, the more likely it is that greed will be punished.
To give the greedy their due, they perform a service: By overpricing, they preserve an eve-of-game supply of tickets for persons willing to pay a premium for last-minute impulse purchases. Unfortunately, such persons are apt to be richer than thee, hence presumptively greedy.

[horseshoe1]

They apparently love scalping so much in Columbus that all you have to do is go to the city and PAY for a permit and it is O.K. Is this called greed?
I was trying to sell 2 tickets for face value on the street last year and was told by a cop to stop or be arrested because I didn't have a permit but right next to me was many, many people selling dozens of tickets for much more than face value.
Then we wonder why the REAL fan and his family can't get into the game.

[grnvllbuck]

horseshoe1, the same thing happened to me a couple of years ago when I was trying to unload some tickets I didn't need. I was told by the cop that I would need to go on the other side of Lane Ave. since (without a permit) I was not allowed to be selling on private property. I think I was standing near the sidewalk in front of RiverWatch Towers. I ended up unloading the tickets north of the stadium where the religious protestors like to hang out. So, I guess it's not ok to sell on private property, but just fine to sell on University property.