Why aren't concert tickets sold by dutch auction?

It seems that whenever you have a popular event, notably concerts in smaller venues and certain plays, the venue sells out their tickets quickly, and then ticket speculators leap in and sell the tickets at high margins. Ticket speculating (aka scalping) is legal in some areas and illegal in others. I don't think it should be illegal, but I wonder why the venues and performers tolerate so much of the revenue going to the speculators.

Or am I wrong, and this is not happening? Is it the case that often the speculators miscalculate and lose money so they only make a modest income? It doesn't seem that way to me. Now, there are many ticket brokers with large web presences (including some who sponsor my joke site) and tickets are commonly auctioned on eBay.

So why don't the venues or ticket companies create their own auction sites to auction tickets, with some fair system like a dutch auction, and keep all the money from high-demand events for themselves? Is it simply because this seems elitist and they feel it will annoy fans?

Currently, fans are annoyed because speculators scoop up tickets to high-demand events as soon as sales open, and such events sell out quickly, before actual fans can get them. That seems far worse to me. An auction system would actually allow lesser tickets to sell for less money and generate the same revenue for the event.

This seems so obvious, why isn't it taking place? Is it simply inertia, or a fear of requiring computer access in order to get tickets? While just about anybody can get computer access these days, dutch auctions can be done by phone if you trust the 3rd party managing the auction. Call in once, set your maximum bid for the various ticket classes you will accept, then find out the resulting price later. People at computers would have a small advantage, but not that much. The venue could set a floor/reserve price if they don't want to cheapen the value of their product.

Or is this a business opportunity for some company (or for Ticketmaster?)David's essay, noted in the comments below, is interesting but does not account for the success of the scalpers. Many accept the scalper's as a capitalistic "fix" for the non-market-priced tickets, allowing those with more money than time to get seats without having to wait in line or be lucky when ticket sales begin. But few would state it's a good idea that the profit goes to the scalpers.

One solution might be "official" scalping. In official scalping, buyers of tickets (be then fans or speculators) could tell the official box office that they are open to resale of their ticket, and possibly an ask price. The box office would run the bidding, and take a piece of it.

How much a piece is hard to say. Too much and it makes sense for sellers to head elsewhere to sell, though if they can make doing so illegal (as it is in many places) they can obviously exact a higher price. They have an inherent leg-up as the obvious place to go buy. And of course they can also sell any unsold tickets in this higher priced aftermarket.

But the margin for them remains much poorer than they get if they sold the tickets at auction to begin with, or at least some of them.

Without having asked anyone at Ticketmaster I'd guess that the average user would absolutely hate the experience. Most/many people don't like the "bid and cross your fingers" buying experience.

- ask

David Friedman has a good essay on why people resist changing prices at:
http://www.daviddfriedman.com/Academic/econ_and_evol_psych/economics_and_evol_psych.html

Is this what you mean?

http://www.ticketmaster.com/h/auction/ticketmasterAuctionsUS.html
http://query.nytimes.com/gst/abstract.html?res=F30E16FA3F5C0C728CDDA00894DB404482
http://www.onlisareinsradar.com/archives/001688.php
http://www.eastbayexpress.com/issues/2005-03-30/news/feature_5.html

On the other hand, I don't find a lot of events with auctions; most of the auctions I do see would seem to be "special" packages, with some sort of unique souvenir.

I think you overestimate the average person's acceptance of scalping.
I believe enforcement of rules against scalping is limited mainly by the costs of catching current scalpers, and that if institutions with reputations started scalping, the ease of prosecuting them would increase demand for more law enforcement, and there would be some boycotting of those institutions' other sales.

As Paul found out, Ticketmaster already supports it.

Apparently it's the venues and artists who don't like it. :)

- ask

ticket scalping

I'm seeing more and more artists with seats in the first 10 rows with auctions on ticketmaster...and even more artists with $300-$500 fan club presale tickets for tickets and either a meet and greet or **possible meet and greet or just a lousy guitar pic from the band... you even have NFL teams like the philadelphia eagles partnering with online brokers or offering "ultimate experience packages", ultimate touchdown seats in the first 5 rows in the 50 yard line for $500 a crack...Basically it really does come down to the artists or teams and what they are willing to do...heck some bands like the Fake Queen with Paul Rodgers tried/attempted etc... to sell seats at $400 a crack and failed thus having to release them into ticketmaster.....So to answer your question there is plenty of scalping and auctions and all sorts of price raising going on by the bands and teams but they want their cake and want to be able to eat it too...i.e. look high and almighty and reasonable to the fans and to also charge high prices with the guise of experiences....Also keep in mind that scalpers actually have to take risks, whereas the teams and bands can make up prices and if they don't sell them just lower them until they do sell....or if say only half the stadium sells they can still cause fake supply and demand and make just as much money i.e. if they sell 1000 seats at $50 and half the place is empty, it's the same thing to them as selling 3000 seats at $16.75 or whatever.....

As a regular concerts

As a regular concerts attender I find that the selling tickets policy is a real mess and people like me share the same opinion. There shouldn't be allowed buying a large number of tickets by the same person, we all know what happens next and it's very frustrating. Personally I think buying online tickets is much more convenient.

Some speculation...

Concert promoters and venues aren’t idiots. They know how much they are leaving on the table to the scalpers. And they could stop it. But they don’t. The question is why?

  • Are they just stupid, or rather hidebound and monopolistic, and too resistant to the change computers could bring them?
  • Do they secretly like what the scalpers do — assuring sellouts while letting true fans wait in line for cheap tix — enough to turn a blind eye?
  • As one person suggested, is there a secret conspiracy? Ie. do they take kickbacks from the scalpers or get a portion of their gross, allowing price differentiation without taking the blame for it?

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His name is Brad Templeton. You figure it out.
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