Born too dumb? The scalpers beat Bruce Springsteen once again
Published: Thursday, February 02, 2012, 5:30 AM
e Springsteen performs at a rally for Barack Obama in 2004: If he charged higher prices maybe he could afford a nicer shirt.Well, it’s happened again. The scalpers have outsmarted Bruce Springsteen.
Last time that happened, the scalpers were brought up on federal charges.
But let’s face it: If the powers-that-be are going to insist that being smarter than Bruce Springsteen is a federal crime, they might as well throw up fences on the borders and declare the whole country a prison.
That’s not just my opinion. It’s also the opinion of the economist who is perhaps the pre-eminent expert on ticket pricing in America. That’s Steve Happel. He’s a professor of economics at Arizona State University who has had great fun over the years studying the secondary market in tickets to concerts and sporting events.
“If I ever got to meet Bruce, I’d like to say to him, ‘I know you’re a nice guy, but you’ve got your head up your (expletive that rhymes with “bass” — the fish not the guitar) when it comes to economics,'” Happel said when I called him yesterday to discuss the recent scalper attack on tickets for the upcoming tour by the Boss.
“He does this every time,” Happel said. “The same stuff happens every time and yet he doesn’t change his behavior.”
What he does is sell his tickets for less than they’re worth. The inevitable result is that scalpers will buy as many as they can and then resell them at a profit.
Economists expect this sort of thing, but it drives rock stars crazy. It also drives politicians crazy, even those who should know better — such as our governor.
When Chris Christie was asked about the issue on his Tuesday evening call-in show on 101.5 FM, the state’s No. 1 Springsteen fan said he was upset by the way in which the scalpers cornered the market. The governor even suggested that state Attorney General Jeffrey Chiesa might investigate it.
To those of us who believe in letting the free market work — a group that admittedly seems to consist of me, Happel and not too many others — that’s appalling. We were even more appalled in 2010 when the U.S. attorney indicted a group known appropriately enough as “Wiseguy Tickets Inc.” for having come up with a scheme to outwit Ticketmaster’s computerized system for limiting ticket sales.
The U.S. Attorney’s Office argued the guys should be put behind bars, but U.S. District Judge Katharine S. Hayden let off the Wiseguys — who had pleaded guilty to federal fraud charges — with probation, calling the state of the law in this regard “very gray.”
If Happel had his way, that law would be black and white: If you decide to sell tickets for less than they’re worth, then you can’t complain when people resell them at market price.
Happel has studied this issue for years and he’s concluded there is only one way to defeat scalpers. It’s called a “Dutch auction.”
In a Dutch auction, the initial price is set at a high level and then decreased a little bit at a time. You could put tickets on sale for, say, $500 each and then let the price drop a dollar a minute. Whatever price they sell at will, by definition, be the market price. Scalpers can’t sell high when they can’t buy low.
“People will pay the price they want to pay,” Happel said. “No one will pay more than they want to pay.”
Better yet, you could enter the market at your convenience. Under the current system, you’re paying for that ticket in more ways than the simple dollar value. Think of the thousands of Bruce fans who lined up at their computers to be ready to type nonsense words like trained chimps the morning those tickets went on sale. That amount of frustration can’t be figured in dollars.
Of course, the artist could always sell the tickets at the box office the evening of the show. But then, thousands of people would spend hours standing around in the parking lot.
One way or the other, you pay what the market will bear. In my case, that would be about $15. That’s what my cheapskate buddy and I paid a scalper to get into the final Springsteen concert at the old Giants stadium.
The concert was great. We got our money’s worth.
Heck, I would have paid $20.