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Ticket Scalping as a Means of Managing Risk

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  • Vincent Geloso

Abstract

Ticket scalping (known as touting in the UK) is often criticised for raising prices to consumers and producing unjustified profits. Conventional economic theory, however, shows that ticket scalping allows tickets to be reallocated in a more optimal manner with regard to the utility of consumers. This article points to an additional benefit from ticket scalping: by providing a secondary market it acts as a potentially powerful tool of risk management for event organisers. It is argued that curtailing ticket scalping may in the long run lead to a decline in the supply of privately provided events and concerts, especially lesser-known ones. This in turn may stimulate a demand for public subsidy.

Suggested Citation

  • Vincent Geloso, 2014. "Ticket Scalping as a Means of Managing Risk," Economic Affairs, Wiley Blackwell, vol. 34(3), pages 335-339, October.
    • Handle: RePEc:bla:ecaffa:v:34:y:2014:i:3:p:335-339
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    References listed on IDEAS

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    1. Alessandro Lizzeri, 1999. "Information Revelation and Certification Intermediaries," RAND Journal of Economics, The RAND Corporation, vol. 30(2), pages 214-231, Summer.
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