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Letters to the Editor

From time to time, a commentary on the world will bubble up inside of me to the extent that I'm forced to write a letter to my local, metropolitan, daily newspaper, The Age. This is where I blow of some steam. Feel like venting too? Add your own comment or visit my homepage.

Wednesday, June 07, 2006

Discrimination and Ticket Scalping

What a pity that Ross Gittins' excellent economics tutorial on willingness to pay, price discrimination and arbitrage (The Age, 7/6/2006) didn't extend to the problem of ticket scalping. As Sam Graves explains (Letters, The Age, 7/6/2006) it's just common business sense: buy cheap, sell dear. There's no problem with some people willing to pay an awful lot for the tickets, while others are less so inclined. The problem lies with Cricket Australia (more-or-less) insisting on offering all tickets at the average price, thereby guaranteeing a supply of under-valued tickets and unmet demand at the higher end of the curve. This potential for profit creates a market.

If Cricket Australia wants to engage in price-averaging, the obvious answer is for them to act like the monopoly provider they are: that is, run the auction (instead of eBay) and ensure the maximum price is extracted for each ticket so that they capture the surplus. Cricket Australia can then set about redistributing this bounty to their "family" as they see fit, without money leaking out to Pommy uni students or online auction houses.



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