See
I Paid $2,500 for a ‘Hamilton’ Ticket. I’m Happy About It. Excerpt:
"It
was only because the price was so high that I was able to buy tickets
at all on such short notice. If legal restrictions or moral sanctions
had forced prices to remain close to face value, it is likely that no
tickets would have been available by the time my family got around to
planning its trip to the city.
High
prices are a natural reflection of great demand and scant supply. In a
free market, in which private individuals can engage in mutually
advantageous gains from trade, they are inevitable until demand subsides
or supply expands.
The comedian
Jay Leno
learned this lesson some years ago. In 2009, while the economy was
suffering through the Great Recession, Mr. Leno, a car enthusiast,
generously performed two free “Comedy Stimulus” shows for unemployed
workers near Detroit.
Yet
zero is not, as economists put it, the equilibrium price to see a live
performance by Jay Leno. Some of the unemployed who received free
tickets tried to turn around and sell them on eBay for about $800. When
Mr. Leno learned about this, he objected, and eBay agreed to take down
offers to resell the tickets.
But
why should Mr. Leno have objected? Some unemployed workers, presumably
short on cash, thought that the $800 in their pockets was more valuable
than an evening of laughs. Similarly, the ticket buyers would
voluntarily give up their $800 for a seat. The transaction makes both
buyer and seller better off. That is how free markets are supposed to
work.
The
only person made worse off by the sale is, perhaps, Mr. Leno himself.
He wanted to be seen performing before an audience of the unemployed.
Doing a show for higher-income residents of Michigan might not be viewed
as altruistic, even if it left the unemployed better off. In other
words, Mr. Leno’s objection to the eBay resale was arguably a rationally
self-interested act in that the resale impeded his ability to appear
selfless to others and, even, to himself.
Although
I don’t object to ticket resales above face value, and I think it is
pernicious when others do, I was saddened by my “Hamilton” transaction
in one important way. About 80 percent of what I paid went to the ticket
reseller, rather than to Mr. Miranda and his investors.
In the past,
Mr. Miranda has objected
to the automated software that quickly buys as many tickets as it can,
so they can be resold at a profit. But there is an easy way to put these
resellers out of business: The theater can charge higher prices to
begin with.
Such
a move would surely increase the show’s profitability. From my
standpoint as a theater consumer, that’s a good thing. Future talents
like Mr. Miranda would find it easier to fund their innovative theater
projects. And with more projects funded, those consumers who don’t buy
“Hamilton” tickets — perhaps deterred by its uniquely high prices —
would find a greater variety of other shows from which to choose.
Those
who run Broadway theaters clearly feel some unease about charging so
much. That is one reason they often hold a few tickets back and offer
them cheaply in lotteries the day of the show.
Yet
Mr. Miranda and his investors could find better ways to give back to
the community than vastly underpricing most “Hamilton” tickets and
enriching ticket resellers. Maybe fund scholarships for theater
students. Or maybe fill more seats with high school students (which is
already happening to some degree, thanks to a grant from the Rockefeller Foundation)."
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