Tickets for Sale! Prices Declining?

Sports fanatics will be pleased to hear that professional teams are now finding new ways to sell surplus tickets at reduced prices. The change is a result of fans not purchasing tickets as frequently as they once did with the new sales models reflecting that of the airline and hotel industry; when demand is high, so are prices, and visa versa. The main problem confronting these teams is that fans are buying less and less tickets, especially for games with little to no significance. The problem isn’t selling tickets for playoff matches between two high-caliber opponents, rather, the problem arises when two teams with little appeal face off (Wizards vs. Bobcats). The proper term for the process of ever-changing valuations would be”price-gauging” and it helps to steady supply and demand by creating  prices that take into account both variables. In instances where it’s not deployed, for example at grocery stores during Hurricane Sandy, people rush to Grocery store and clear- it- out because of the high demand and low prices. If the prices don’t reflect the actual demand, as happened during hurricane Sandy, the grocery store is left with a lot of empty shelves. The problem with the ticketing industry is that prices are too high and demand too low at current levels,  so some professional teams are stuck with a myriad of unsold tickets and empty stadiums. Services have been created to connect buyers and sellers, like Stubhub, but unless the seller is willing to take a loss on his purchase, the prices never truly reflect the price someone is willing to pay for them especially for games with little attractability. A couple of Northwestern Professors may have cooked up the recipe using a dutch style auction which may help to fill up those seats. Instead of having a set-price with no volatility, the dutch style auction would start with a price significantly higher than the retail price and decline it incrementally so as to get a sense of a buyer’s true valuation of these tickets by the amount of sales that occur at each interval. After all the tickets have been sold the service then determines a “final price”, thus compensating those who purchased their tickets earlier with a fairer price reflective of the prices paid on the whole. Recently sites have created bid style auctions in where the buyer makes an offer to the seller, and then depending on the offer the seller can either accept it or deny it. The problem with these is that they make the process of buying a ticket much more complicated than it actually is. This dutch style auction would seem to alleviate this problem as well as create an efficient system of getting the right tickets into the hands of the right buyers.

http://www.npr.org/blogs/money/2013/02/12/171800681/hey-sportsfans-get-fired-up-for-a-uniform-price-multi-unit-dutch-auction

MOS

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