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How Much Is Michael Bolton Worth to You?

Thursday, July 11, 2013   (0 Comments)

New York Times Magazine (06/09/13) Davidson, Adam

An entire subsidiary business exists to exploit the underpricing of tickets for concerts and sporting events, and from an economist's perspective, the very presence of scalpers and outfits such as StubHub demonstrates that tickets are far too inexpensive to balance supply and demand. University of Victoria economist Pascal Courty cites two distinct pricing styles: Charging as much as the market will bear, and keeping prices far below market value with only a few price points offered. The second practice may seem like altruism, but artists who undercharge fans can be more profitable than those who maximize each ticket price, by having promoters overcharge for merchandise. However, Ticketmaster North America president Jared Smith says performers who charge the least often see the most scalping. Scalpers have reached a high level of sophistication, typically using computer programs to buy tickets en masse when seats go on sale, leaving many fans with no option but to purchase from resellers. Smith says charging a more accurate price at the outset is a surefire way to discourage scalping. He says overall, performers who charged much more for the best 1,000 or so seats would lower the incentive for scalpers to procure these tickets, as well as let artists charge even less for the rest of the house seats.


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