Price Discrimination of Inauguration Tickets
Gotta love capitalism, especially gray and black markets. Of course I’m referring to the underground market that has sprung up, mostly online for tickets to witness history in the making, the for the inauguration Barack Obama. Craigslist is pretty busy with people with all kinds of tickets for sale, scalpers lucky enough to get their hands on some tickets will make a decent amount of change. The prices themselves range from $100, $250 for seats along the ticketed mall viewing area, $500 for the standing area, and as much as $3500 for seated tickets. That’s a hefty chunk of change for being a witness to history.
But what are the tickets really worth? On the demand side there are ample numbers of potential buyers that price being part of this event as very high, in the hundreds and thousands of dollars. Also driving the demand side is the emotional stakes that are attached to this event, I notice often that discussion goes from being a “witness” to history as to “being a part” of history. For the faithful, saying that they were in the crowd on a cold January morning is in itself a priceless experience for which no price is too high. On the supply side, there are a limited, finite number of tickets in various levels of grading, that is closer to the steps of the capitol. Also these tickets are not for sale, they are in available only through the congressional offices, which each member having the full discretion to allocate them in the way that he or she sees fit. All of these factors have all the makings of an interesting economic case study of price discrimination.
The disconnect between the relative value of the good is easily exploited by potential buyers coming from out of town that have never seen the capitol, the national mall, or the distances that are involved. This also goes to the disconnect that people place on the value of the tickets themselves, to a certain extent, the value is more to the allure of them being a hard to come by commodity, and a symbol of the ticket holder’s savvy or connection to some high political office. Maybe its that ultimately like any other material good, there is a certain amount of value associated with social status symbols. That is people want to feel that they are special or elite through what they have. Another disconnect are those that have never attended an inauguration in person either, so they don’t have any experience to gauge an appropriate price. I really hope that in trying to get tickets, people would just calm down and save their money, especially in these tough economic times.
I went to the 2005 inauguration, and remember how far away the seats were from the actual podium, I ended up watching the whole thing on the jumbotron. Of course I wasn’t too thrilled at the time about the results of the election, but I was more or less interested in just going for the sake of going. This time around I’m happier about the overall results, I’m not as sold yet on the bigger picture and long term direction that the new administration is proposing. But its still a big event, and I’m still intrigued that I’ll be in town to witness the event. As for me, I think I’ll stick to some taking some pictures of the crowd, and collecting some commemorative metro tickets instead. Maybe buy a T-shirt.