[TylerE]

Seems like a fair way to do it (while still extracting lots value), would be to a sort of dutch type auction. E.g. theater seats 1000, so you take bids for the max people are willing to pay.

Then, once that closes out, you take enough people to fill, say, the first 5 rows off the top of the list, and charge them whatever the lowest winning bid is of the people in that group. Repeat for each tier going back until the venue is sold out.

This actually tackles the inefficiencies at both ends - people willing to splurge on great seats get them, but if a show is not high in demand, you might still get people who kind of want to go to pay, say, $5 for the nosebleeds.