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Wednesday, December 02, 2009

On secondary markets

How low do basketball tickets go on the secondary market when the team is banging on history's door? If the team were going for a 16-0 NFL season or were setting a season-record number of wins in MLB, one might expect the street price of tickets to be considerably higher than face value.

Economists have long scratched their heads at the higher-than-face value of tickets on the street - it seems that team owners are leaving money on the table. Many economists have offered suggested reasons why tickets seem to be underpriced relative to street values.

What is under-appreciated in the literature, although I have a paper that explicitly recognizes this fact, is that it is not guaranteed that a ticket reseller will be able to sell a ticket for more than face value. Indeed, trying to unload a ticket to a Tuesday evening Kansas City Royals vs. Cleveland Indians game might not be that easy. Earlier this year I sold two tickets to the Arizona State-UGA game for a combined $9 - of course it was raining buckets at the time so I was happy to get anything for the tickets and I hope the folks I sold them to had a good time.

In today's Sporting News Today is a brief report about tickets for tonight's New York Nets vs. Dallas Mavericks game in New Jersey:
Tickets for tonight's Mavericks-Nets game at Izod Center are "being sold for up to 40 percent below face value," a ticket broker told the New York Times, but some resellers showed seats in the upper bowl were going for as little as $2 and some in the lower bowl were dumped for $8. If the Nets lose they will be 0-18 - an NBA record for consecutive losses to start a season.
Lesson learned: witnessing history on the bad side is not as valuable as seeing history on the up side.

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