EconTalk host Russ Roberts talks about scalping and visits AT&T Park hours before Major League Baseball's All-Star Game to talk with a scalper, a merchandiser, a fan, and the police about prices, tickets, baseball and the law.
Intro. Economic fieldwork at Baseball All-Star Game. Scalping, gouging sometimes judged as immoral or illegal, but both parties better off. Some cities have made it legal, some teams have created websites to make it easier for ticket-holders to buy and sell tickets. E-bay, StubHub make it silly to try to stop it on the streets. Interview a few hours before the game. Scalper Alex, who doesn't like being called a scalper because he believes he is doing something different from what is traditionally called scalping. Unlike a traditional scalper who buys low and sells, high, Alex works with ticket brokers who buy tickets at original price and then try to sell them at higher prices. Ticket brokers for SF Giants game bought lots of season tickets.
Two scalping stories. 1. Russ and wife wanted to go to musical Les Mis but couldn't find tickets seated together. Scalpers had two non-together seats but wanted $200. Offered someone waiting for a friend $100, but was refused.... 2. Taking son to a Cardinals game in St. Louis. Holds up two fingers in a V indicating wanting two tickets....
2007 SF All-Star Game. Interview with Alex, retailer, ticket broker representative. Takes tickets on consignment, deals in quantity, has developed clientele. Have to make character judgments to buy tickets from a stranger--what if ticket is not valid? Anecdote: Ticket scalper claims game is sold out and says "Why would I lie to you?" Presentation matters for Alex, gives people his business card, dresses nicely, looks people in the eye, becomes knowledgeable about the facility and about the particular game. Wants repeat customers, so no reason to lie. 44,000 tickets doesn't mean that many seats--some standing room only. Box office price $145 for standing room, high end seats around $400. On open market over $3000/ticket. Premiums for tickets somewhat before the game, after game worth 0; try to catch market on the downswing. Typically prices dip just before the game. Market will clear at about an hour past the printed time of start of game. After that, customers will object that the game is underway. Alex does also work the street. Most he's sold tickets for. Signing up with hard work for tickets to small-venue events. "Beyond the Sea," San Francisco, Kevin Spacey singing. Opportunity cost--is it worth it to see the show if the market price is very high? Munger podcast. Pearl Jam. Tickets so far for this game were primarily only to season ticket holders. Lottery for standing room only areas--Alex won opportunity for two sets of tickets. Sold home run derby tickets and traded others for All-Star game tickets. Discretion important for a big game like this. Law different from legislation--Boudreaux podcast. Has website reselling changed the experience on the street? Has increase in information narrowed the price range?
Plastic sleeve lanyards salesman. Free spot viewer (outside the stadium, allowed to go in for three innings to observe game). Would pay maybe $100, would have to wait till fifth inning to get one for that price. Home run derby legitimate ticket. Alex and Russ outside StubHub, where you can pick up a ticket close to when the game starts, 1/3 mile from game. A lot of venues price their tickets such that it's worthwhile for brokers to buy them up. Why do artists let brokers make all that money? Pricing the venue efficiently. On efficiency grounds, different rows should have different prices. "Music's for the people" is one answer to why artists allow venues to ignore this and sell all tickets for one price. Alternative answer: Earl Thompson at UCLA--a half-filled theater where the front is empty is undesirable both because of people sneaking into seats and also to artist, who wants front filled. Baseball teams have monopoly which may explain it. SF Giants are the people's team both in spirit and also by legal structure of how they are paid for via taxpayer money. Barbara Streisand and Frank Sinatra charged market prices. Season ticket sales offer sellers some assurance.
Police officers, security guards: Is it legal to sell tickets at more than the box office price? Various answers: "Yes." "Can't comment on it." "People do it every day." "I don't know." Summary, free spot, knot-hole gang, lets Giants feel better about charging high prices. Alex's tickets sold.