scalping - why do we care?

Lately there has been a lot of fuss about scalpers selling tickets to things like the cricket and Big Day Out on ebay. The promoters are trying to declare that tickets sold through ebay are invalid etc.

Now, maybe I'm missing something, but what is all the fuss about?

As I see it, an event has N tickets being sold at $M each. If the event is sold out, then the promoter gets $N*M from the ticket sales and N fans of whatever it is attend the event and scream their lungs out with happiness. So, if some of those N tickets get sold for more than $M by scalpers, so what? The promoter hasn't lost a dollar and there are still N fans turning up to the event. Indeed, one might argue that someone prepared to pay a lot more than $M to buy a ticket from a scalper is more of a fan than someone prepared to pay $M. So in fact, these purchasers are not just fans, but uber-fans. Who better to attend?

So who gets harmed by scalping? Well, I guess the uber-fans paying the mega-dollars are harmed because they are paying more than they "should", but since they freely and willingly purchase the tickets at those prices, it's hard to see them as victims here.

Who else? Well, the person who missed out on a ticket from the normal ticket sales because "their" ticket was snapped up by the scalper has been harmed. But of course the number of people who actually missed out in this way is quite small (exactly equal to the number of scalped tickets). But of course there is a difference between perception and reality. Everyone who missed out on a ticket may think they missed out on a ticket because of scalpers, when of course most of them actually missed out because supply was less than demand. Even in the absence of scalpers, lots of people miss out on tickets to a sold-out event. So I think a lot of people think they are harmed by scalpers when statistically speaking they probably weren't.

When all is said and done, if there are N tickets available, then there will be N happy people with tickets and everyone else who wanted tickets is unhappy, regardless of scalpers. So, it really comes down to how those N people are chosen from the pool of potential attendees.

Current methods of selling tickets are pretty much first-come first-served, so it is the first N people that get the tickets. Is that fair? Well, if you are someone who can camp out overnight in the queue or spend all morning on the phone or WWW trying to get the tickets, you have the advantage over those who aren't free to do so, so it probably sounds fair to you. But what if you are the ambulance driver who spent the 2 hours in which the tickets sold out getting someone out of a car wreck? First come first served doesn't sound very fair to the ambulance driver. Indeed FCFS could be argued to favour the idle and the drones of our society over those making productive contribution. Surely that's not very fair?

So if our ambulance driver spends the extra bucks to buy a ticket from a scalper, taking the place at the event of one of those idle drones who might otherwise have got the ticket, isn't this a better outcome? Maybe we should allocate the tickets in the first place according to "contribution to society", but that's a bit hard to implement, at least until we achieve a reputation-based economy (see Cory Doctorow "Down and Out in the Magic Kingdom").

Why not just auction off all the tickets to begin with? Then if they sell for more than $M, then the event gets the extra cash. After all, if they put on a good event, don't they deserve to get more cash? Oh, it's not fair to the poor you say? True, but we auction houses all the time. Surely poor people should have the same right to live in riverside mansions as rich people? No? So why should tickets to Big Day Out be any different? We deal with supply-and-demand problems all the time by letting the rich have the rare things while the poor miss out.

Should we do it by lottery like the Olympic tickets and Commonwealth Games tickets? That sounds fair. Well, a lot of athlete's parents and spouses missed out on tickets in those lotteries and didn't get to see their child/spouse win their gold medal or whatever. What about the person who has supported their team in every competition all season? Don't some people have more right to attend than some random lucky ticket winner?

I guess the point I am making is that someone is always going to miss out and sometimes it won't be fair (by whatever definition you give to it), so why not accept it and move on? Maybe the people buying the scalper's tickets are the ambulance drivers and the athlete's parents? All the scalper is doing is changing the basis for choosing some of the lucky N people. So what if they make a few bucks from doing so? They are supplying a service that is clearly in demand. They take the risk of buying the tickets in the hope of reselling them. What makes them any different to a retail store or any other middleman?

So while I continue to have a vague unease about scalping, whenever I think about it, I find it hard to justify my concern. Maybe by blogging about it, I will be able to accept it as simply as a niche economic phenomenon and move on.