|
|
|
|
Creating a Futures Market for Major Event Tickets: Problems and Prospects
By Stephen K. Happel and Marianne M. Jennings
Introduction
In a 1995 article in this journal, we discussed the legal, economic, and ethical concerns in trying to prevent "free-market" ticket scalping. Since the time that article appeared, the Internet has become a source of information as well as a business and contract formation tool. Knowledge, products, and negotiations move in far more efficient manners because of the facilitation of inexpensive communication and interaction via the Internet. Major event tickets—those that attract national audiences such as the NFL's Super Bowl, the PGA's Masters, the NCAA Final Four, or even a Bruce Springsteen concert —are traded openly on eBay and other Websites.
Yet, despite the vast amount of personal wealth in the United States and the relative ease with which consumers can travel to any event site in the country, the availability of this new technology that facilitates national and international exchanges of price information and tickets has not created a nationally organized futures market for major event tickets. This paper explores this "market failure" and considers the likelihood of correcting it. The first section examines the character of tickets, exploring their nature as call options. The following section looks at the ticket resale statutes of 50 states along with various municipal statutes and describes the current legal environment surrounding ticket sales. The third section considers the different distribution channels open to potential consumers of major ticket events. The fourth section reviews recent microeconomic studies of event pricing and ticket scalping that have appeared since the time of our previous article. The final section explores the reasons that the major entertainment event ticket market remains fragmented and examines whether a nationally organized national market will emerge in the near future.
Full Text (PDF, 19 pages, 75 KB)