Transcript SUPER BOWL TICKE TS - Pomona College Economics

SUPER BOWL TICKE TS
Copyright, 1996 © Dale Carnegie & Associates, Inc.
Introduction
Game Day at Super Bowl XXXV and at
least 1000 fans are holding “tickets
wanted” signs in front of the stadium
Ticket holders report offers of $5000 for
tickets with face values of either $325 or
$400.
Source: Krueger, Alan, “Supply and Demand An Economist Goes to the Super
Bowl,” The Milken Institute Review, Second Quarter 2001, pp. 23-29.
Topics for Discussion
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With a fixed number of seats in the
stadium, what are possible methods of
allocating tickets among fans? What
are the arguments for and against each
method?
What explains the behavior of the NFL?
Of ticket holders?
What is a “fair and reasonable price” for
a ticket to the Super Bowl?
“To economists, scalping is a
benign activity that creates value.”
Explain.
Interesting Ideas
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Has the “law of one price” been
repealed?
Salant’s implict long term contract
model
Becker’s restaurant pricing model
(status good?)
Thaler’s endowment effect.
Gift exchange motive
Basic Concepts
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In market equilibrium, price is such that
quantity supplied equals to quantity
demanded.
Market tends to allocate a good toward
its highest private value user.
Market outcomes may not always seem
fair.