Greg Mankiw is an economics professor at Harvard, and in the post that follows below the jump, he takes note of Florida’s repeal of its anti-scalping law. In sum, he says if people want to pay high prices, let them. The Florida legislature and Gov. Jeb Bush agreed.
Jeb Bush on Ticket Scalping
The Miami Herald reports: “Gov. Jeb Bush signed a bill into law Wednesday that removes penalties for ticket scalping….Under the measure, Florida’s 60-year-old ticket scalping law, which forbids selling tickets for more than $1 above the face value, will be eliminated and in its place will be an open-market system that will allows ticket owners and Internet brokers to sell tickets at whatever price the buyer agrees to pay.”
The only economists I know who might be opposed to the repeal of anti-scalping laws are textbook authors. If all states followed suit, we would have to find new examples of ill-conceived government meddling with market mechanisms. For now, those of you lucky enough to have a copy of my favorite principles text can read the box on ticket-scalping in chapter 7.
Despite the view of most economists, the bill was controversial. This editorial from another Florida paper encouraged Bush to veto it, on the grounds that anti-scalping laws protect the consuming public and event promoters from the economic harm done to them by persons who artificially corner the market for tickets to public events. Not a particularly compelling argument. But this line in the editorial caught my eye: “John Stoll, owner of a of West Palm Beach concert-promotion company, termed the bill “ridiculous” because it only “makes more money for scalpers.”
This leaves me with three related questions:
Why would someone who makes a living putting on concerts object when ticket resellers get their products into the hands of buyers with the greatest willingness to pay?
Why do concert promoters often price tickets well below the equilibrium price in the first place?
If a concert promoter like Mr Stoll sold tickets with a “not for resale above face value” clause, should the government prohibit scalping as part of its duty to enforce private contracts?