Thursday, February 15, 2007

Why?

Can anyone explain why these sold for $1300?


http://cgi.ebay.com/2-The-Police-Tickets-Madison-Square-Garden-MSG-NY-8-3_W0QQitemZ220082588838QQihZ012QQcategoryZ16122QQrdZ1QQcmdZViewItem

:)

21 comments:

joelleb said...

Besides the fact that the Police are awesome, the reason the reason as to why the tickets sold for so much deals with the fact that concert tickets are an elastic commodity. Demand overall is going to remain strong for Police tickets, mainly because they have a wide fan base and the fact the band itself is a scarcity, because, obviously they aren’t together any longer. Also, because the band is having a limited number of shows, and the current tour will most likely be their last increases demand.

Seating for the concert could also be a reason as to why the price of the tickets were so high on ebay. This, in itself is a matter of price discrimination and fans paying a wide range to see the same concert (although you could say the “experience” is different depending on if you sit in the nose-bleed seats or the front row).

Ashley said...

Question: Gina and I were talking about this today. In our "Econ Class Bible" it says the online quiz's are due 2/19 but we wont have covered everything by then will we? i was wondering if we could extend the due date to the morning of whenever the test is. Thanks! :)

joelleb said...

Correcting my above post, I meant that the concert tickets were inelastic commodity instead of elastic. Sorry for any of the confusion. :)

Wojtek said...

Good job, Joelle. You hit the nail on the head. Scarcity of their shows, predictions for future (it really might be their last concert) and a hard to assess fame that attracts fans. That all together causes the prices to sky rocket.

I don't fully agree with the price discrimination that you mentioned. I think that there is a difference between sitting in a front row and sitting on the top of the second balcony. I t is later debatable is the difference worth the difference in price but the span (or range better?) of ticket prices is reasonable.

Wojtek

PS what does it mean "nose-bleed seats"?

Dan said...

Well, Joelle is right. The close tickets are scarce and many people will pay ridiculous amounts of money for rare things that they really like/want.

Basically, the scarcity of the items caused a panic to buy up what was left.

KM said...

Excellent analysis, Joelle! :)

I've seen Sting in concert, but the guys just don't get along AT ALL, so I never figured I'd have the chance to see them in concert together.

(sigh)

I don't have $1300 sitting around doing nothing, though. :) I guess I'll have to settle for listening to cd's.

(plus, Sting sings a lot of Police songs in concert, so it was almost that good...)

Rooooxxaaaaaaannnnnnnnnnnnnnneee....you don't have to put on the red light!

KM said...

Yes - online quizzes are extended to Mon 2/26 - the day of your test (at the moment).

Thanks for reminding me. :)

KM

champion said...

I have a question (i think it pertains to economics as well as government): if a good is inelastic, what constraints are there on price? like your example in class yesterday--even if prescription meds cost a million dollars, people would still need them. what is done to regulate the market and make sure companies don't overcharge ridiculously for goods that are necessary and inelastic? (other examples: hospital costs, gas, even mandatory insurances?)

KM said...

(Beth-

I'm not ignoring you ... I'm waiting to see if anyone else answers you... )

:)

Kate said...

The reunion of Police was rare, and after the success of Sting, many people would notice his talent, and want to see more of him...

Naked Economics talked about this kind of...how we pay star athletes so much money simply because there aren't many that can do as well as them, and the Police is an example of this. There aren't many people in this world who can ROCK as awesome as the Police, so they will get paid more...the demand for the Police is hot! Quantity demanded is up!

Kate said...

in response to beth's question...

i think what is done to help regulate the market so that it comes to not having to pay extrememly high prices is to break up monopolies. An example of this is Reaganomics (or so I believe...) As Mr. Swantz told us (on numerous occasions...) Reagan broke up the airline company so there would be more so they would have to compete and consumers wouldn't have to pay so much, kind of what Wisconsin is trying to do with cable companies around here. Now, this brings up the debatable topic of whether or not government should interefere with the economy at all....discuss, anyone??

Mary Hable said...

This is for Beth's question:

I think this would be a time when the market doesn't regulate itself so the government needs to step in and help. And, Yes Kate, government should interfere with the economy here otherwise how else would people be provided what they need to survive, like medications and trips to the emergency room and heat? Unless you believe that because people can't afford these things that they don't have the right to them. But, that would be soul-less and WRONG.

Raveen Shah said...

Well, along with Joelle's explosive commentary-
The tickets sold for such a high price because they are a scarce (low supply) product yet in high demand. Also, the price of the tickets is quite high because there are only so many times the group will get together for such a show in a large market like New York (price discrimination played its part for the city).

rageena said...

... because some people are just too rich.

kfbare said...

Kate's airline comments made me think about a little dilemma I am going through right now. In like December my friend and I bought tickets to go to Alabama to stay with her grandparents at their condo. We were supposed to leave Thursday. Well... a family emergency came up and her grandparents are no longer down there. So I started looking at tickets to go to my grandma's condo in Florida. It is ridiculous!! Its almost a $500 dollar difference in the price we paid 2 months ago and the price we would pay now, less than a week before-hand. I think we talked about this in class... this price discrimination. But I think it kinda has to do with inelasticity because airline companies think that I am some business woman who is getting sent on a last minute business trip. Of course they figure my boss is going to want me on this plane no matter the price, so they jack it up. UGH. It sucks for people like me who never plan ahead for things (my friend was the one who got the tickets). I thought I remember something else about if they have remaining tickets, they would lower the price to get people to buy them but not too low that they won't profit. I could use some of those tickets!

nick_oehlrich said...

Scarcity and a high demand raises the price plain and simple. People will pay greatly for it because it is such a demanded thing with low supply.

rageena said...

I was reading about Katie's ticket situation... I plan on going to Hawaii this summer... when would be the best time for me to buy, accordign to all the rules of supply/demand/etc? I know they'd be cheaper now, but do they really increase THAT much?

Dan said...

Rageena, your best bet would be to buy it for the hottest time of the year. Everyone else would have warm weather, so the demand for Hawaii will be lower and the price for those tickets will be alot cheaper. Also, the earlier you order the tickets, the more you save.

joelleb said...

Rageena, I sound like a travel agent here, but the longer you wait, ultimately, the higher the ticket price will be. Prices will be high during the summer due to families having vacation time. In regards to Dan's comment, I don't really think tourists necessarily come to Hawaii (or any tropical locale) during the most favorable weather for the islands, but rather when the weather is worst everywhere else. Most tropical islands have consistent weather year-round (although there are dry and wet seasons), so weather on the actual islands has little effect on demand.

KM said...

Pricing on airline tickets is weird. Generally, a few months ahead is the best time - OR sometime like the night before. If you go to a place like http://www.lastminutedeals.com , they actually have awesome prices for vacations, because by the time it gets really close to leaving - the airlines want those seats filled!

The worst time is probably 1-3 weeks before leaving.

Some airlines offer a rebate of sorts - if you buy a ticket and the price goes down, you can get the difference.

Weird, hey? It's more of the elasticity part (that business vs vacation traveler that Katie mentioned) rather than straight S & D.

All I know...is that we got our Vegas tickets cheap. :)

KM said...

Wojtek - sorry, missed your question somehow -

"nosebleed seats" would mean really high up, probably not able to see the stage all that well. As in, when you go higher in altitude, the air gets thinner and can cause nosebleeds. :)

And "range" is probably better than "span" for your answer.