[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.

[blhack]

Everything you just said assumes that there is never a secondary market.

There is. That is the problem. Nobody cares about spending $400 for a ticket. To burners, that's a very tiny price to pay to get "home" for a week, and is a tiny fraction of the overall cost of the trip.

If we can figure out a way (like, hello, names on tickets) to make the tickets non-transferable, then figuring our a reasonable price isn't an issue at all.

--

The burning man ticket problem is logistical, not economic.

[btilly]

People who refuse to learn economics keep making the same mistakes. :-(

Nothing that I said makes any assumptions either way about the secondary market. In fact in the real world a secondary market serves a valuable purpose for people who want to go and then are unable due to unexpected circumstances (sickness, loss of income, etc). Or for people who buy an extra ticket to gift a friend, and then find that the friend you had in mind got their own ticket already. There are a lot of reasons other than being an evil speculator to want to sell a ticket on a secondary market.

But even with a secondary market, the mechanism that I describe according theory would vastly reduce scalping. If someone is willing to plan ahead and pay $1000 to be there, they are guaranteed of getting a ticket at the same price as everyone else. Of course there will always be people who fail to plan and buy at the last moment, but theory says that this pool should be much less profitable for scalpers than people who were willing to pay top dollar but got unlucky.

An additional benefit for something like Burning Man is that you get an accurate read of what your actual market is. A non-profit need not use this to maximize profits. If you could, for half again as much, get a space that is 2x as large, can you rent it and still break even? With the rich data set from the auction, you can get a much better read on whether that is feasible than with traditional ways of selling tickets.

[enneff]

Just curious: how would the burner community react to being forced to present ID "at the door"?

[stonemetal]

Say the tickets are $400 as you said, then everyone who got one bid > 400 dollars everyone who didn't get one claimed the most they were willing to pay is < 400 dollars. Assuming they weren't lying were is the secondary market? You are unable to sell your ticket for more than you paid for it so the secondary market acts as loss reduction device not a money making endeavor.