KARL E. CASE
The value of scalping
SECTION 10, Row M, seats 1 and 2 -- obstructed view. Lakers and Celtics at the Garden, seventh game of the 1984 NBA championship series. I spent two nights on Causeway Street to get "strips" to the playoffs that year. Nine dollars each!
In those days there was no StubHub or
My 8-year-old daughter called to me in the shower the day before the final game. "Hey, Dad, there's a woman on the phone who wants to buy your tickets to the game tomorrow. Want to sell?"
"Tell her to jump in the Muddy River," I screamed. She yelled back, "Maybe you should talk to her, Dad." The woman was offering $500 each.
A few weeks ago, single-game spring training tickets went on sale on the Red Sox website. I will be in Fort Myers when the Red Sox play the Yankees March 12, so I gave it a try. Finding myself in their "virtual waiting room," I sat at my desk for about half an hour hoping to get a couple of reserved seats at the face value of $21. By the time I got out of the virtual queue, the game was sold out. I immediately logged onto StubHub, where dozens of tickets were offered at prices ranging up to $300. Today section 119 is selling for $400 a ticket. Scalpers today are much quicker and more organized than when I got that call 23 years ago.
But the logic is still the same. Ticket scalping is nothing more than the age-old law of supply and demand at work, and it illustrates the eternal tension between the entirely valid case for free markets and the cry that the market system can lead to unfair outcomes.
The argument for unfettered scalping: You have something that I want (tickets), and I have something that you want (money). So we trade. Voluntary free exchange is evidence that the trade makes both parties better off, and the agent gets a commission for bringing them together. Everyone is better off than they would have been had the trade not occurred. The scalper has made a commission for providing a service, and no one is worse off. Stopping scalping clearly makes people less well off, and the state has no business getting involved.
Admittedly, that leaves out a big part of the story. Why are the "cheap" tickets put out there in the first place? And who "should" get them? The Red Sox can't sell tickets for what the market would bear; if they did, people would burn down Fenway Park. It is in the team's long-term interest to have a broad, loyal, culturally and economically diverse fan base to support them no matter what. Besides, doesn't the team really belong to the city? Having seats available at prices that the bulk of the population can afford seems only right.
If you accept this argument, you probably would like to see scalping stopped. But can it be ? Probably not. The problem is that the bulk of the population won't fit in Fenway. And once the tickets hit the street, watch out for the market. History is littered with failed efforts to avoid allocating things by consumers' willingness and ability to pay. State stores in the former Soviet Union that sold bread and meat and at "fair prices" had shortages and long lines -- and were undermined by a powerful black market.
If the system allocates a good (tickets or bread, say) to one group when there are others who are willing and able to pay more, potential buyers will be in touch. With today's technology, there is virtually no way to prevent them from communicating with potential sellers. There will always be scalpers.
On June 12, 1984, the Celtics beat the Lakers 111-102 on the parquet floor for the NBA championship. I was there in section 10. I was also there for the triple overtime against Phoenix in '76 and the double overtime against Milwaukee in '74. And I was there when Roberts stole second. I don't know whether it was good or bad for society that I was in those seats, but I will never forget those games.
I didn't have to discuss where I got the tickets with a government official. Nor should I have to.
Karl E. Case is a professor of economics at Wellesley College. 
© Copyright 2007 Globe Newspaper Company.
