microeconomic

in the neWS

Irekef Scalping To allocate resources *,r*.rrr, an economy must get goods_including tickets to the Red Sox_to the'consumer,

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Like It or l{ot, Scalping Is a Force in the Free Market By Cnnnles SrEru

f hiR Case devotes a ciass each year to \-the reselling of sports tickets. He has

a section in his economics textbook on the same stibject.

But for Case, an economics professor at Wellesley College, the sale and scalping of sports tickets is more than an interesting theoretical pursuit. Like Margaret Mead, he

has done plenty of firsthand research in the jungle, and he has the stories to prove it.

ln 1984, Case waited in iine for two nights on Causeway Streer to get S 1 1 tickets to one of the classic Cehics_Lakers championship series. The night before the climactic seventh game, he was in the shower when his daughter called out to him: "Dad, there's a guy on the phone who wants to buy your Celtics tickets.,' Case said he wasn t selling. ,,But Dad,,, his daughter added, "he s willing to pay at least $|OOO apiece for them.',

Case was selling. An hour later, a limo anived at the house to pick up two tickets_

one that belonged to Case and one to a friend of his. The driver left behind $3.000.

To Case and other economists. tickets are a textbook case of the free market in action. When supply is limited and demand is not, prices rise and the people willing to pay more will eventually get rheir handi on the tickets. "As iong as people can com, municate, there will be trades,', said Case.

ln the age of the lnternet, buyers and sellers can link up online, through eBay or the sites devoted solely to ticket sales. But even in the pre-lnternet era, the process worked, albeit more slowiy. ln 19g4, the man who bought Case,s ilckets was a rich

f,lew Yorker whose son attended a Boston private school. The man called a friend at :he school, who called someone else, who :l,entually called Case. Where there is a will, :here is a way.

Trading happens no malter how hard :eams try t0 suppress it. The National icotball League gives some of its Super 3o',vl tickets to its teams, and prohibits them

'rcm reselling. Yet many of those same tick- :is wind up back on the secondary market. :3st season the league caught Minnesota

','jkings head coach Mike Tice selling his :j€kets t0 a California ticket agency. "l regret : " Tice told Sports lllustrated afterward. 0r .: least he regretted getting caught.

Like any good market, the one for :,-kets is remarkably sensitive to informa- :iir]. Case has a slory about that, too. He

":as in Kenmore Square just before game

';ir of last year's piayoff series between :'e Yankees and Red Sox, The Red Sox -eci dropped the first three games and :i.eie was no joy in Mudviile. Scalpers were

larce: torlo, 6lobe, May i, 2005.

unloading tickets for the fourth game for only slightly more than face value. Tickets for a possible fifth game were going for even less"

But the Red Sox rallied to win game four in extra innings. By 2 that morning, said Case, top tickets for game five were already selling for more than 51,000 online. A bear market had become a bull market instantaneously.

As defenders of the free market, econo- mists generally see nothing wrong with

scalping. "Consenting adults should be able

to make economic trades when they think it is to their mutual advantage," said Greg Mankiw, a Harvard economics professor who recentiy stepped down as chairman of President Bush's Council of Economic Advisers. Mankiw has a section about scalp-

ing in his own textbook.

Teams could eliminate scalping alto- gether by holding their own online auctions

for desirable tickets. Case doesn't expect that to happen. "People would burn down Fenway Park if ihe Red Sox charged 92,000 for a ticket," he said. The team would be accused of price gouging. Yet if you went online last week, you could find front-row Green Monster seals for the July 15 game

against the Yankees seiling for more than 52,000. Go figure.

Case wili be at Fenway Park this Friday. He is taking his father-in-law t0 the game.

He paid a small fortune for the tickets online. 8ut he isn't compiaining. lt's the free

market at work.