On my train journey from Leiden to Utrecht, I read an account of an economist’s ordeal in buying last minute concert tickets. It’s a fascinating tale of the way economists think and analyse scarcity and opportunity.
The price at anytime is determined by the information about supply and demand at that time. Without actual information, supply and demand is communicated through the perceptions of the price maker or his expectations.
There is never a truly sold out concert. There will always be incentives for ticket holders to sell. In this case, scalpers or touters get hold of extra tickets with the expectation that the concert will sell out and there will be people wanting to buy last minute tickets.
With plenty of time to transact, these touters ask for high prices.
The closer it gets to the concert, the more information is revealed, such as another source of tickets available for sale.
I often compare concert economics with that of airfares. Last minute airfares are expensive because airlines deliberately overbook. I tried it myself. [See The Myth of Last Minute Flights, Bon Journal, 2 January 2005] Ticket holders can’t exchange their tickets or sell back. As such, it’s rare they will cancel. As for concerts, people will cancel due to illness, new obligations, or other reasons. Concert reservations are rarely overbooked — instead, there is a waiting list.
I would love to see chamber music concerts sell out and witness the phenomenon described by the economist. More often times than not, concerts don’t sell out. Many concert producers don’t even use a pre-payment reservation system. Thus, nobody knows.