Buying Tickets Online

by on October 12, 2006 · 10 comments

Last week I was in New York City for a hearing on ticket scalping (I prefer the nice term “reselling”) and the impact scalping (resale) laws have on online businesses like eBay, StubHub and RazorGator. My colleague, Steve DelBianco, testified at what turned out to be an interesting hearing on what’s really best for the consumer (see his blog post on this). I’m happy to say that most agreed that a free market for secondary sales of tickets is in a consumer’s best interest.

Gone are the days of having to go to the event and purchase a ticket from some gruff, shady character. Sites like eBay and StubHub offer a safe (and often guaranteed) experience for buying and selling tickets. But in case you haven’t noticed, venues and teams will often prevent these resales–just look at the small type language on the back of your ticket next time you’re at a Yankees game (which, thankfully, won’t be until next year!). The Yankees have already “evicted” 10 or so season ticket holders because they resold their tickets (mostly on eBay). These restrictions are on single-game tickets as well.

So here’s where the libertarian in me is somewhat conflicted. The ticket is legally a license, so it is a contract that I willfully entered into. If the Yankees want me to only use THEIR approved exchange to resell my ticket, I agreed to that. BUT, don’t most people assume their ticket is personal property, to give or sell to whomever at whatever price? Perhaps this is a property rights issue.

Regardless, here is the testimony that my organization presented last week. And if you’re really interested in how corrupt the entertainment and Broadway ticket sales market is in NYC (something that an open and transparent online market would help), check out this Spitzer report.

  • http://www.techliberation.com/ Tim Lee

    The question is who should bear the costs of enforcing the contract? If the Yankees want to enforce its contract, it’s free to sue scalpers, or to institute a scheme of picture IDs so that only the ticket purchaser is allowed to use the ticket. Monitoring and enforcement is a standard part of doing business when you sign a contract. Scalping laws shift enforcement costs that ought to be paid by the Yankees onto the shoulders of the taxpayer. That doesn’t seem very libertarian to me.

  • http://www.techliberation.com/ Tim Lee

    The question is who should bear the costs of enforcing the contract? If the Yankees want to enforce its contract, it’s free to sue scalpers, or to institute a scheme of picture IDs so that only the ticket purchaser is allowed to use the ticket. Monitoring and enforcement is a standard part of doing business when you sign a contract. Scalping laws shift enforcement costs that ought to be paid by the Yankees onto the shoulders of the taxpayer. That doesn’t seem very libertarian to me.

  • http://www.cs.westga.edu/People/LewisBaumstark Lewis Baumstark

    I sometimes wonder if it’s more than shifting enforcement costs (thought I’d agree that’s part of the deal as well). By having scalping laws, some (if not most) of the public animosity toward the contract is shifted to the government.

    That sounds very vague. Ugh. Maybe I can rephrase.

    My thinking is, if this were a standard contract between the private parties of the ticket holder and the ticket seller, then the seller becomes the target of consumer backlash when the anti-reselling clause is enforced. Buyers buy fewer tickets, post nasty criticisms of the contract’s fine print on blogs, etc. But this way, the seller can simply point to the law and say “it’s not our fault”. So the law, if not the government itself, becomes the scapegoat (even though the ticket sellers were the ones who pushed the law through). It becomes an extra layer of indirection for the sellers to avoid the public-relations risk inherent in enforcing these contracts.

  • http://www.cs.westga.edu/People/LewisBaumstark Lewis Baumstark

    I sometimes wonder if it’s more than shifting enforcement costs (thought I’d agree that’s part of the deal as well). By having scalping laws, some (if not most) of the public animosity toward the contract is shifted to the government.

    That sounds very vague. Ugh. Maybe I can rephrase.

    My thinking is, if this were a standard contract between the private parties of the ticket holder and the ticket seller, then the seller becomes the target of consumer backlash when the anti-reselling clause is enforced. Buyers buy fewer tickets, post nasty criticisms of the contract’s fine print on blogs, etc. But this way, the seller can simply point to the law and say “it’s not our fault”. So the law, if not the government itself, becomes the scapegoat (even though the ticket sellers were the ones who pushed the law through). It becomes an extra layer of indirection for the sellers to avoid the public-relations risk inherent in enforcing these contracts.

  • http://www.cato.org/people/harper.html Jim Harper

    Here’s a little thing I wrote a while back about the effort by sports and entertainment producers to suppress secondary markets for tickets and convert tickets from bearer documents into personal licenses.

    In the case I wrote about, they seemed to be attempting to use RFID (ham-handedly) to improve enforcement of contractual non-transfer provisions. I agree that using contracts and technology is fine in terms of libertarian theory and limited government, but it does prevent a market in tickets from moving them to their highest and best uses.

  • http://www.cato.org/people/harper.html Jim Harper

    Here’s a little thing I wrote a while back about the effort by sports and entertainment producers to suppress secondary markets for tickets and convert tickets from bearer documents into personal licenses.

    In the case I wrote about, they seemed to be attempting to use RFID (ham-handedly) to improve enforcement of contractual non-transfer provisions. I agree that using contracts and technology is fine in terms of libertarian theory and limited government, but it does prevent a market in tickets from moving them to their highest and best uses.

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