Hannah Montana is the hottest thing going. Her concerts are all sold out and scalpers are netting thousands of dollars for her tickets, according to media reports. What is an economist who wants to see a Hannah Montana show to do? Here is the true story of one such escapade. (The economist in question has asked me to keep his identity secret, out of fear that his reputation as a doting father will eclipse his economic accomplishments.)
His story starts just the way you might expect:
I had been working especially long hours recently. My family capital was running dangerously low. My oldest daughter Annika is a huge Hannah Montana fan. I figured it would be a good time to refill the tank and spend some quality time with Annika, so I announced gloriously in the morning that Annika and her papa were to see Hannah Montana that evening.
Our hero had not, however, mentioned to dear Annika that he didn’t actually have tickets to that night’s concert.
I quickly realized how out of touch with reality I am-the event was “sold out” and the ticket prices on various scalper sites were beyond reach for this academic’s salary. I concluded that I would take Annika to the local Wal-Mart and buy her a Hannah Montana CD and doll in lieu of the show.
This economist has raised far better children than I have, as you’ll see.
Annika raced in the house after school wondering when we would leave for the event and where we would be sitting. I shamefully broke the news that I had yet to find tickets. She took the news well, claiming that she really only knew half of the Montana songs anyway. Deep inside she yearned to go to the concert, but was not willing to admit that her papa let her down.
Shame is a powerful motivator.
After some reflection, I boldly announced that we would hold the course; Annika and I would leave at 5 p.m. for the show. I figured this would get us to the United Center by 6 p.m., with plenty of time to find a ticket scalper on site and get situated. After pilfering the family stash, I had enough cash in hand to pay up to $200 per seat, which I figured would gain us access to the restricted viewing seats (situated behind the stage).
If only it were this simple.
With heavy Chicago traffic, we arrived at the United Center just after 6:10 p.m. I wasn’t worried yet, as we still had 50 minutes to find tickets and get to our seats for the concert opening. For the first 15 minutes, we searched for tickets without much luck. No one was selling, and the euphoria around the stadium was beginning to get to Annika. Her eyes gleamed, and my willingness to pay shot up to $300 per seat…better find the closest cash machine!
Around 6:30 p.m., we came in contact with the first ticket scalper. He offered us some not-so-good, restricted view tickets, for $400 each. Glumly, Annika and I passed. I did not even have that much cash available. After haggling with a few other scalpers, the best offer I could find was $300 each for restricted view tickets. The price was too high.
The economist then does something so stupid and out-of-touch that only an economist would think to do it.
I decided to approach the United Center ticket box to inquire about available tickets.
Unfortunately for our hero, the show had been completely sold out for four months, and the woman behind the counter reminded him of that when he got to the front of the line. All the others in line had pre-ordered tickets and were collecting them at the will-call window. But as deluded as the economist was that he was going to be able to buy tickets at the box office minutes before the show, the strategy had an unintended benefit.
As I got into line, the ticket scalper who had stood firm at $300 for the restricted view tickets suddenly offered them for $275 each. “No thanks,” I said. Time was running out-6:45 and still no tickets. Annika told me to just buy the tickets for $275 each, but I told her to be patient.
Undeterred, the economist continued along the same path.
I approached a different ticket office. Once again my approach was interrupted by the ticket scalper who now offered the restricted view seats for $250 each. The official at the ticket box again refused my request, but I felt I was onto something. When I approached the ticket box, the ticket scalpers became anxious, trying hard to sell me their tickets. It dawned on me that the United Center must be releasing tickets slowly. Perhaps they had some tickets in hand that were still available.
There is obviously no way that there are any tickets left.
Out of the corner of my eye, I caught another ticket box, this one different from the others-it had a disabled sign placard clearly displayed. I approached the official at this window and asked if he had two tickets. “Yes,” he replied. “Two seats in the second row.” I was stunned. I openly wondered how this could be the case, and he informed me that they were just released to the public. I happily paid $66 per ticket.
Hurray! Against all odds, little Annika would get to see the concert from the second row. Oops, not so fast. This is an economist, after all.
I had gotten extremely lucky. Given the ticket prices I had been quoted by the scalpers, these two tickets were likely worth at least $1,000 apiece. If I acted quickly, I could sell them, and then go find the scalper with the two restricted view seats. His price might be down to $225, in which case I would net roughly $1,400 in profit, and Annika would still get to see the show.
Brilliant plan, except for one small detail:
I quickly explained my plan to Annika. We didn’t have time to dither. I strode off in search of buyers for our tickets. When I turned around to beckon Annika to follow me, I saw silent tears streaming down her face.
Torn between what he knew was the right thing to do (sell those tickets for as much as possible) and appease his daughter, the economist faced a tough choice. He knew he would be criticized later, but it had to be done.
I grabbed Annika’s hand and we headed for our seats. My colleagues would berate me at faculty lunch, but I would forgo this wonderful money-making opportunity and watch Hannah Montana from the second row.
The story ends happily:
Upon our arrival at the seats, one of the backup singers named Candace greeted us. Annika gave her a hug for good luck. As she left, Candace said that she would wave to Annika. Our seats were so close that Hannah even touched Annika’s outstretched hand at one point. Annika was kept busy singing and dancing the entire show. The smile never left her face. Remarkably, during the show, Candace even kept her promise. Her wave to Annika was heartfelt.
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Here’s my kids and scalpers story.
It was about 2 years ago, so my recall of the details may be imperfect, but this is roughly how it went…
My 4.5 year old boy had convinced me to take him to the monster truck show. I’d never been, but figured it would be tolerable for me and exciting for him.
We live in St. Louis (metro population ~2.8 million). Surprisingly, rather than holding this event at an arena, they were holding it at the main football stadium in town. Perhaps they needed the room – surely there would be a glut of tickets…
I’d heard radio ads for a reasonably good deal, something like $20 for adults and $10 for an accompanying child. To avoid the hassle (and possible added fees) of on-line purchase, I figured we’d buy at the stadium ticket booth. We headed down to the stadium…
The first sign of trouble was all the traffic in downtown. There was a different event going on at the nearby arena, and I think some Mardi Gras festivities as well. Still, there seemed to be a LOT of cars headed towards the stadium.
Between the traffic and the distance we had to walk to the stadium, we were running late. I was projecting that we’d get to the ticket booth perhaps 5 minutes before show time. My boy was super hyped by now, and I was beginning to worry about the consequences should I be unable to get tickets.
Before I got to the ticket booth, I bumped into a scalper. It appeared to be a normal parent with a couple extra tickets – not a pro. IIRC, the tickets were around $30 each, ~$60 total. While these were probably better quality than the discounted tickets I planned to buy from the ticket booth, I didn’t really want to pay TOO much for tickets to a car show. Still, we were running late, and there was no telling how long it might take to find the ticket booth and buy tickets. I negotiated to ~$40 for the pair, a ~$10 premium to what the radio ad was promoting.
We got into the stadium, and it was PACKED. It seemed clearly sold out, and had I tried to save the $10 by going to the ticket booth (or simply not bumped into the scalper) there’s a good chance I would have had a crying boy on my hands.
The show was surprisingly entertaining, even for this late 30s parent. It was also LOUD. Monster trucks revving their engines create quite a racket, even when they’re 100-200 feet away from where you’re sitting.
Technically speaking, didn’t he maximize his utility by making his daughter happy?
Not all forms of value are purely in cash.
Great story.
I know there’s been a lot righteous indignation over ticket brokers, the price of Hannah Montana tickets, and event prices in general, but I think people are missing the other side of it. Ticket brokers also make it possible for you to easily buy tickets for under face value if you are willing to take a chance and wait until the last possible minute to buy tickets.
Last month my family got Pistons tickets and invited my Sister-in-law and nephew to come along. They didn’t have tickets but we figured they could find some online. On the morning of the game my 10 year old nephew went online and found 2 tickets 5 rows off the floor for $50 apiece. The face value on the tickets was over a $100 and the tickets we had bought a month in advance, literally 5 rows from the top of the Palace, were $37 apiece. I don’t think I’ll ever buy tickets in advance again. I’m going to wait it out and let brokers get desperate.
if you wanted to hide the identity of the economist, you should have changed the name of his eldest daughter
(http://home.uchicago.edu/~jlist/JLIST_CV.pdf)
“Torn between what he knew was the right thing to do (sell those tickets for as much as possible)….”
Economists sure have a screwed up notion of what is “right”.
Similar thing happened to me for the DC Hannah Montana show. Hit Craig’s list, eBay, and StubHub thinking the prices would drop on concert day. They had not.
Went to Ticketmaster on a lark and found two in the 5th row from the stage. THAT was a good day for my 8 year old and me.
This strikes me more as an example of a bubble than an example of classic utility functions breaking down. The economist in this case would be a day-trader, while his daughter would be Warren Buffett.
Just as with a stock, the value of the ticket can become removed from its price. Clearly the price accepted by the ticket office was lower than the value of the ticket, but also the $1000/ticket figure the economist envisioned was surely more than the ticket was worth.
In situations like this, it makes a lot more sense to recognize, as his daughter did, that the tickets were worth significantly more to the pair than they paid for them, and was thus a good investment. The economist saw with jealous dismay that other people were making more profit than he was, and was infected with the speculator’s fever.
Luckily, his daughter was there as a grounding influence.