Seatwave is passionate about the right of fans to resell tickets they no longer need, and thinks that the secondary market offers lots of benefits for people who want to enjoy live events.
Many academics have also looked into the subject of secondary ticketing and have pointed to evidence that blocking the secondary market has the effect of raising ticket prices, and would therefore be negative for consumers.
Links to their thoughts are available here.
Why does the secondary ticket market exist?
Rockonomics: the economics of popular music
Marie Connolly, Princeton University; Alan B. Krueger, Bendheim Professor of Economics and Public Affairs, Princeton University and NBER
Summary
The paper analyses concert revenues, including the rising price of concert tickets, price measurement, and reasons for the secondary ticket market.
Connolly and Kreuger suggest several reasons for the existence of the secondary ticket market, one being the demand uncertainty. Consumers enter the process of buying a ticket not knowing, in some cases, what type of seat they will get. If the seat is a bad one in the consumer's view, they may resell it, they argue.
Connolly and Kreuger argue, in the case of concert tickets, if ticket were priced high enough, the secondary market would be eliminated, suggesting many tickets are under priced.
Click here for the full paper.
How regulation of the secondary ticket market affects price
Another look at Anti Scalping Laws: Theory and Evidence
Craig A. Depken, II, Department of Economics, University of Texas at Arlington
Public Choice, 2006
Summary
Depken investigates the impact of anti-scalping laws on the face value of tickets in professional football and baseball.
Empirical analysis suggest that in US cities with anti-scalping laws average per-game season ticket prices are approximately $2 greater in baseball and $10 greater in football. Anti-scalping laws actually increase team revenues, as the laws have no adverse effect on attendance.
Depken suggests there are two types of fans - true fans and 'speculators'. True fans place a higher value on their tickets than speculators, as speculators are unsure as whether they will attend the event. Allowing resale causes promoters to lower ticket prices to capture the speculators in the market. Removing speculators, by preventing resale, means only true fans buy tickets. As true fans value tickets higher promoters can and will increase prices. In conclusion, Depken argues the prevention of resale increases prices.
Click here for the full paper.
Do anti-scalping laws make a difference online?
Daniel W. Elfenbein, Assistant Professor, Washington University, St. Louis - John M. Olin School of Business
2004
Summary
Elfenbein examines the relationship between state level anti-ticket scalping laws and online ticket scalping by examining transactions for National Football League tickets completed on eBay between 2002 and 2005.
Stricter ticket resale regulation resulted in "fewer online transactions, a greater frequency of transactions that crossed state borders, as well as higher prices and markups in the secondary market".
Elfenbein suggests that the regulations offer scalpers (touts) the opportunity to charge a high mark up.
Click here for the full paper.
The Folly of Anti-Scalping Laws
Stephen K. Happel, Professor of Economics, Arizona State University and Marianne M. Jennings, Professor of Legal and Ethical Studies, Arizona State University
The Cato Journal, 1995
Summary
Poses the question: "Why do many promoters and certain consumers become so outraged by the attempt to clear markets through ticket scalping?"
"Scalping is inevitable as long as there are advance ticket sales for big-time events and fan pressure to keep prices affordable to the general public."
Hapell and Jennings push for legalised reselling at an event site - what some would consider traditional touting.
The result, they argue, will be smaller profits for scalpers due to "competitive pressure and greater open-market access".
Hapell and Jennings suggest distributors/ promoters can then control the extent of touting and number of touts by better "read[ing] the market the time tickets go on sale" and by "anticipat[ing] subsequent changes in consumer desires".
Click here for the full paper.
Profiting from Partial Allowance of Ticket Resale
Xianjun Geng, Assistant Professor, Department of Information Systems and Operations Management, University of Washington;
Ruhai Wu, Assistant professor, Department of Economics, Florida Atlantic University;
Andrew B. Whinston, Hugh Cullen Chair Professor, Center for Research in Electronic Commerce, Department of Information, Risk, and Operations Management, McCombs School of Business, University of Texas at Austin.
Journal of Marketing, 2007
Summary
The paper challenges the orthodoxy that allowing resale in the ticketing market hurts the profits of the original seller. The paper considers an alternative strategy in which resale is only partially allowed - one where 'on-spot' resale (resale outside the venue) is banned but advanced resale (over the internet) is allowed. The authors show it is possible for partial resale to outperform no resale. The economic model they propose contains two types of buyers - low valuation buyers and high valuation buyers. Partial resale, it is argued, allows sellers to capture "all or most" high valuation buyers regardless of when they want to buy a ticket. No resale allows sellers to capture high-valuation buyers on the basis of when they want to buy a ticket. Therefore, when the advance price for a ticket is higher than the on-the-spot price, sellers should compare profits they can get by capturing high-valuation buyers and by capturing early buyers. If the former is larger than the latter, the seller should allow resale.
Click here for the full paper.
How pricing strategies affect the resale of tickets
Some Economics of Ticket Resale
Pascal Courty, Department of Economics, European University Institute
Journal of Economic Perspectives. Spring 2003, 17 (2) p.85-97.
Summary
Courty uses a comparison with airline ticket pricing to suggest resellers of tickets for live events are able to charge a "substantial markup" because promoters and ticketing agencies do not support 'resell for profits' and block the secondary market.
Courty posits that promoters can capture the profits for the secondary market.
Courty does not, however, treat "under pricing as the fundamental cause of secondary ticket markets"
He adds "brokers provide a service: availability in the late market…They help the promoter price discriminate and it is possible that the promoter ends up selling more tickets with the presence of brokers."
Click here for the full paper.
Ticket Pricing Under Demand Uncertainty
Pascal Courty, Department of Economics, European University Institute
Journal of Law and Economics. October 2003, XLVI (2), p. 627-52
Summary
Courty examines what pricing strategies promoters should employ when pricing tickets.
He suggests "rationing and intertemporal sales are never optimal".
Courty suggests two pricing strategies. The first is to identify those consumers who value tickets the most (some might call them 'real fans'). The promoter can sell close to the date of the event, or sell early and allow resale to achieve this goal. Courty implies that as either of these strategies work, there is no incentive for the promoter to allow resale, despite the fact that consumers are willing to pay more when they can resell tickets.
The second the promoter chooses to sell to 'uninformed' consumers in advance and allow resale. The choice of consumer and allowing ticket resale, Courty argues, should be "chosen jointly as part of a coherent ticketing strategy."
Click here for the full paper.
Optimal ticket pricing strategies
An Economic Guide to Ticket Pricing in the Entertainment Industry
Pascal Courty, Department of Economics, European University Institute
Louvain Economic Review. 2000 p. 167-192.
Summary
Seeks to explain price variations observed in ticket markets and between different types of seats.
Examines how producers fine tune ticket prices to take into account differences between seats, such as location, time offered etc
Click here for the full paper.
When Promoters Like Scalpers
Larry Karp, University of California Berkeley; Jeffrey M. Perloff, University of California Berkeley
Journal of Economics & Management Strategy, 2005
Abstract
Karp suggests if monopoly suppliers of tickets are unable to use the price mechanism to discriminate between certain types of buyers in the market, the presence of resellers in the market could be beneficial.
Click here for the full paper.
Effectiveness of regulation of the secondary ticket market
Ticket Scalping Discussion Paper
Live Performance Australia, 2006
Summary
Live Performance Australia, the trade body for Australia's live entertainment industry, commissioned a study to make recommendations on policy for ticket touting/ ticket resale.
The report recommended "the experiences of other countries suggest that criminalization is largely ineffective in preventing scalping for live performance events", adding "LPA believes that there are many options other than criminalisation available to the industry to create an environment that both discourage ticket scalping, and put control and revenue from ticket sales back into the hands of promoters and ticketing agencies."
It concludes "recommended "the experiences of other countries suggest that criminalization is largely ineffective in preventing scalping for live performance events".
Click here for the full paper.
Effect of legislation on the market for tickets
Do Anti-Ticket Scalping Laws Make a Difference?
Andrew T. Williams, St Mary's College of California
Managerial and Decision Economics, Vol. 15, No. 5, 1994
Summary
Williams raises the question on ticket scalping regulations: `Who benefits from the law?' He adds "Economists typically view transactions between willing buyers and willing sellers, such as ticket scalping, as welfare improving". He suggests interference in the 'free market' for tickets could be evidence of 'rent harvesting'.
Click here for the full paper.