Reply To: Market Price


It isn’t safe to assume that vendors who sell tickets are uncontrolled by local governments. Concert halls, sports arenas, etc. are subsidized by governments and therefore, their policies are likely controlled. For an example of a somewhat hidden government control, consider anti-gouging laws that prevent gasoline stations from raising prices to clear markets in “emergencies.” The resulting excess demand isn’t a market generated result even though the man of the street might see it that way. The mere fact that it is illegal to resell a ticket at a price above face value is prima facie evidence, although not proof, that the government is controlling the pricing policy of the vendor.

But even if vendors set their own pricing policies and price tickets below market-clearing to give charity to some of their customers or to create buzz for the event, the market still clears. Secondary markets arise and generate this result if it doesn’t occur in primary markets.