Ticket Scalping: A Misunderstood Consequence of Supply and Demand
The truth is simple: If there are ticket scalpers, there was an error in pricing. They are merely balancing supply and demand.
The purpose of the market is to distribute scarce resources efficiently. When the demand for a good or service exceeds supply, the price should rise until they are equal – which did not happen in the case of Taylor Swift.
In a scenario where the tickets were correctly priced, fewer people would be willing to pay more, thus controlling demand. With this, scalpers would hesitate to take more risks, for fear of not being able to resell the tickets at an even higher price.
What happened was the following:
The underpriced tickets triggered demand. The scalpers identified an opportunity in this imbalance, knowing that the tickets would sell out quickly and, consequently, could be resold at a higher price.
This “higher price” is, in fact, the real market value of the ticket, a value that should have been set from the beginning by the event organization.
That’s why I said that scalpers are just ensuring that supply meets demand.
Having said that, it does not surprise me that the law prohibiting ticket scalping was enacted by Vargas, a president who believed that the State was the great savior of the people.