Concert Tickets and the Beauty of Market Processes

Lynne Kiesling

So the KP Spouse and I had OK Go/Snow Patrol tickets for last night’s show at the Aragon in Chicago. In a colossal spate of bad timing, I got on a writing roll at about 4:00, and although I’ve not been having writer’s block, I’ve been having enough trouble working on a coherent conceptual framework for the writing I’m working on that I didn’t want to disturb the roll I was on. Plus I am more of the Snow Patrol fan in the house.

So I made the executive decision not to go to the concert (fear not; we’ve seen both bands in concert before, so it’s OK). In hindsight it turned out to be the right decision; I got some important stuff worked out last night.

But that meant that I had two tickets that had cost me $40 each, and they were tickets to a sold out show. So what’s a girl to do? Sell, sell, sell!

Luckily I live only about 9 blocks from the concert venue, so I zipped over there, determined that my range of terms of trade was between $30 (face value) and $40 (with the Ticketmaster “convenience charge”, bloody monopolists) per ticket. I asked a few people within a +/- one-block radius of the Aragon; a couple of folks who are clearly ticket arbitrageurs but not in the target market demographic for the bands thought that $40/ticket was too steep. Shouldn’t they have known that this was a sold out show, and that OK Go’s YouTube dance video is all the rage? But in truth, they knew that they had to get them from me under face in order for them to make a profit. No dice.

So I strolled back and forth past the el stop a couple of times, and watched a young couple standing there looking around expectantly. I plucked up my courage and asked them if they were looking for tickets, and as it happened, they were. Cool!

But here’s the interesting thing: I was totally honest with them, and told them what I paid ($80) and what the face value was ($60, which they could see from examining the tickets). The gentleman of the couple proposed paying me $70, which I accepted. We shared a little sociable chit-chat about the music, smiled and thanked each other, and that was it. I was back home and writing furiously within half an hour, and the whole way back I was yelling to myself (quietly, in my head), The plenitude of capitalism! The beauty of market processes! Sure, I could have tried to make a profit, but at that point the opportunity cost of my time was so high that I was willing to take the $10 (and foregoing the concert experience) hit, just so I could get back to my writing and let the ideas pour out. Mutually beneficial exchange, baby!

Here’s another interesting thing about the experience: note that he proposed to split the difference with me. This is a robust outcome that happens over and over and over in experiments. Splitting the difference satisfies our notions of fairness, and also economizes on bargaining time and costs. I suspect that he wouldn’t have been so inclined to split the difference with me if I hadn’t been so honest with him about the face value of the tickets and the “convenience charge” I paid.

Although I am sad to have missed a concert of two fun bands that I like a lot, all in all this was a very positive experience. In addition to making really good progress on an important piece of writing, I ended up with a great story to tell that illustrates the beauty, civility, and humanity inherent in peaceful, mutually beneficial, voluntary exchange.

That’s a good night’s work.

2 thoughts on “Concert Tickets and the Beauty of Market Processes

  1. “and the whole way back I was yelling to myself (quietly, in my head), The plenitude of capitalism! The beauty of market processes!”

    You know . . . I believe this.

    More seriously, though, I think you’re right about the split-the-difference focal point. And I think of the $10 hit you took as the (market) estimate of your (private) option value, which is really pretty darned low, all things considered.

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