Exam 34: Ticket Brokers and Ticket Scalping

Suppose, during the rapid expansion of NASCAR during the 1990s and 2000s, a racetrack owner kept expanding capacity to keep up with demand. Suppose further that fan interest in NASCAR diminished during the recession of 2007-2009. It would have been in that owner's best interest to reduce ticket prices sufficient to maintain a sellout.

Race tracks that are road courses (as opposed to ovals)where drivers turn both right and left have large grandstands near the start/finish line and smaller ones at the various turns and twists in the course. On a per seat basis, the costs of providing personnel in the grandstand are less than the costs of providing personnel to the smaller ones. In that case the MC curve would be

Figure 34.2 -Referring to Figure 34.2, the price that this promoter will choose will

Figure 34.5 -Since the face value of a ticket is set well before the event, any increase in the demand for a ticket will

Figure 34.4 -Referring to Figure 34.4, the number of tickets that this promoter will choose to sell will

Figure 34.1 -Referring to Figure 34.1, the number of tickets that this promoter will choose to sell will

Suppose one of baseball's most controversial records - the Bonds' 72 home run season - were on the line. Tickets to the games leading up to breaking of the record might command three times the face-value price for tickets. Economists would suggest that a scalping market would appear and it

Figure 34.3 -Referring to Figure 34.3, the number of tickets that this promoter will choose to sell will

Under any definition there is no service that a scalper performs.

Since there are long waiting lists for tickets to events that regularly occur (Duke basketball, the August NASCAR race in Bristol, Tennessee, etc.), a profit maximizing promoter would

Figure 34.3 -Referring to Figure 34.3, the price that this promoter will choose will

If scalpers were to charge exactly face value for tickets to a sold-out event, there would be

The substantive economic difference between ticket scalping and ticket brokering is that

A promoter might charge less than the profit maximizing ticket price because

Figure 34.1 -Referring to Figure 34.1, the price that this promoter will choose will

Since there are long waiting lists for tickets to events that regularly occur (Duke basketball, the August NASCAR race in Bristol, Tennessee, etc.), a profit maximizing promoter might

The Indianapolis Motor Speedway hosts the Indianapolis 500, the Brickyard 400, in addition to other races. During their respective peaks, both events were sellouts. During the late-1990s, the Indianapolis 500 experienced a dry period with 100,000 or more empty seats. . It would have been in that owner's best interest to

The only real difference between what a scalper does and what a broker does is that

A sellout that is profit maximizing, results from the promoter

Once tickets have been sold by the promoter, the model that best explains the role of scalpers is the