Radiohead is famous for doing price experiments with fans. At the height of illegal downloads, the band asked fans to pay-what-you-want for their album. They picked a small venue in New York — the Roseland Ballroom which accommodates 3,000 instead of Madison Square Garden which seats about 20,000 — and limited ticket sales to 2 per customer. But can limiting supply like this really stop a black market from emerging?
The answer is no. I checked Craigslist and there were already tons of ads. Economics tells us that limiting supply will only make price go up. I’m seeing average scalping prices right now — from $400 to $1000 for an $80 face value ticket. But what’s more interesting to me are the desperate buyers, not the sellers. Sellers just list the price they’d like for their goods, but buyers — many of whom don’t have that kind of cash — will start to barter in hopes that a seller is crazy enough not to take cash. This kind of thing is always fun for an informal study on people’s utility curve. The Gothamist has a good roundup of weird things people are offering/asking for (a soul, a date, or “priceless heirlooms or foreign treasures.”)
And of course, for a friend who’s so kind to offer me a ticket (not free, but at cost) I did the only thing I could think of: map his utility curve.
There were 2 conditions to his offer: arrive on time, and 100% commitment to going. Both of which were fine by me. I surveyed him to try to understand why he would give up $1000.
If you have 5 minutes, you can check everything here: http://www.freakonomics.com/2011/09/26/the-price-of-friendship-as-measured-by-radiohead-tickets/
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