[drcube]

Explain the Burning Man comment please.

I'm involved in the local Burners scene, but I've never been to the the big one in Black Rock City. My wife is going this year with a friend, but she was gifted a ticket. So I would like to know what stupid decisions and exacerbated problems I will see if I decide to buy a ticket for next year's burn.

Thanks.

[mhartl]

Last year Burning Man sold out for the first time. In an attempt to alleviate the shortages, this year they had a lottery where people could request up to four tickets per person. The obvious strategy was to request more than you needed, in order to hedge your risk of losing the lottery (essentially a prisoner's dilemma situation). The utterly predictable outcome was worse shortages. They added an aftermarket to "fix" the problem, but (like Louis C.K.) they capped the price at ticket face value. Since the market price is higher, this guarantees shortages.

[peterwwillis]

It's almost strange that they would implement a system like this just because they sold out for the first time. Other regional burns around the country regularly sell out up to a month before the event, and they never implement alternate strategies for people to buy tickets. Then again i'm not aware of a scalper market for these since they are small and regional, but I have often considered buying four tickets at the lowest introductory price and selling them a week before the event ("Hello, my name is Peter, and i'm a capitalist.")

[unwiredben]

Burning Flipside here in Texas has had a lottery system for the last few years due to not being able to exceed 2500 people on site or be under the TX mass gathering law. They make the lottery a little inconvenient (sign up in early January, mail in a money order during one week later in the month, have the MO returned if you don't get tickets). They also have a no scalping policy and regularly go after sales on Craigslist and other sources for more than face value.

[scoot]

not being able to exceed 2500 people on site or be under the TX mass gathering law

Sorry, what? have all major sporting events been cancelled too?

[damncabbage]

No, it doesn't permit gatherings of more than 2500 people to last longer than five hours without a lot of overhead (money and paperwork):

http://law.justia.com/codes/texas/2005/hs/009.00.000751.00.h...

[unwiredben]

no, it's just that when you exceed 2500 people, a bunch of special provisions come into play, like having to provide water, security, vending, etc. that clash with the self-reliance/gift-economy aspect of a burn.

[ben0x539]

> Since the market price is higher, this guarantees shortages.

I don't really understand this. There's obviously more people who want to see the event than there's room, so isn't that what guarantees the shortage?

Raising the price just artificially moves the point where you say "welp, can't go" from not being able to find a ticket to not being able to afford one. It doesn't really improve availability?

[dredmorbius]

That's how economists define "surplus" vs. "shortage".

There's a shortage of a good when the price is set lower than what the market is willing to pay. The economist's solution is to set the price higher (this may also encourage means of increasing supply, depending on price elasticity of supply).

There's an excess of a good when the price is set higher than what the market is willing to pay. The economist's solution is to set the price lower (which may also result in some producers exiting the market and/or reducing output).

There are problems in this theory where it intersects with social / political / physical production. Food, for example, is relatively price-inelastic: there's a certain amount of calories people require to survive on a daily basis, and all the price pressure you can apply isn't going to move mere calories by more than a relatively small amount up or down (people will either starve or become obese). Though you can manipulate food quality: meat (more resource-intensive than vegetarian diets), nutritional quality, freshness, organic vs. artificial / technologically intensive agricultural methods.

[blhack]

*Two tickets per person

[mhartl]

"Up to four" covers two. There was an early lottery that allowed four. (I got four myself.)

[blhack]

Was that the lottery back in, like, November? The lottery in January only allowed 2 per person.

[blhack]

The bmorg completely disenfranchised large parts of the community with a "ticket lottery".

Earlier this year, we were seeing theme camps with something like 10% "success" rate in the lottery, and a lot of the major camps weren't going to be able to go.

It was only through a last-ditch effort, cancelling a second lottery and giving the tickets to "established" camps that they were able to get some of the major theme camps to go.

The lottery played heavily in the favor of scalpers, who very obviously exploited it to their own gain, and this was something that the community had been screaming up and down about since the lottery was announced last year.

[mhartl]

It's not the scalpers who are to blame. It's bmorg (and the broader Burner community) that's at fault for ignoring basic economics and human behavior. Everyone with a rudimentary understanding of game theory saw the whole mess coming a mile away.

[blhack]

The broader burner community (hi!) were the ones screaming at the borg that this was a terrible idea. They didn't care.

[mhartl]

Some screamed about the lottery, but capping secondary sales at face value is a deeply entrenched (and, in my view, terribly misguided) part of Burner culture.

[blhack]

Please explain why capping secondary sales is a terribly misguided thing...

[btilly]

See http://en.wikipedia.org/wiki/Price_ceiling for a basic overview.

This stuff is literally economics 101 supply-demand curve material. When you artificially cap the price too low, you create shortages and a black market.

Economic theory says that what you should do is set up an auction where everyone says how many tickets they want to buy and the maximum price you're willing to pay. The bids are sealed so nobody knows what the price will be until the auction is finished. Sort the bids by price (breaking ties by how fast you put your order in). Everyone actually pays the highest price that anyone not getting a ticket was willing to pay.

Economics and game theory says that the stable equilibrium for this type of auction is for everyone to honestly report the maximum price they are willing to pay. If everyone does then everyone who got a ticket is either indifferent or happy about getting the ticket at that price, and everyone who did not want a ticket would indifferent to happy about not buying a ticket at that price.

Theory assumes that people's opinions about how much they would pay don't change as the event comes closer. This assumption is, of course, wrong. But I do not know of a more fair strategy than this one.

[jes5199]

It's easy to blame scalpers, but I'm not convinced they're a major component of the shortage.

Lots of large events sold out this year much quicker than usual: the Apple Worldwide Developers Conference, Penny Arcade Expo, and others.

I think that the recession is less of a concern for many of us this year, so there's pent up demand being used. Add a lottery to increase the sense of urgency, and you get a lot more people registering for tickets. Not scalpers, just people who haven't been going every year.

[batiudrami]

I had no idea how bad the scalping situation was in the US until I tried to get tickets to a Lollapalooza aftershow (I live in Australia, and am going to Lolla as a part of a holiday).

I waited up late to get tickets, was on at exactly 10am Chicago time, suffered a website crashing hard and, within 15 minutes, the gig had sold out. Defeated, I went to bed (it was pretty late in my time zone).

Next morning, I got up, and there were 400+ tickets for sale on StubHub. For a 1300-person venue. Even if 100% of scalped tickets went on sale, on one website, within 10 hours of the event going on sale, that's still 30% scalping rate. If anyone is wondering, it was Childish Gambino at the Vic Theatre.

Now, I agree that part of the solution is to charge more for tickets (and I'm used to it - a lineup like Lollapalooza's would be impossible in Australia - tickets to a RHCP gig alone go for $150+). However, by allowing scalping to this extreme, Scalpers can buy 10x$30 tickets and sell only 2-3 of them at a ridiculous price to superfans and still turn a profit, leaving the rest unused. Everyone loses except the scalpers.

Big festivals in Australia print your name and date of birth on the ticket, and either only allow you to resell the ticket back to the festival (at cost), who then on sell it under a different name, or charge a fee to change the name on the ticket so that resellers are at a disadvantage. Both have their disadvantages, but both are better than the current situation in the US.