There is no such thing as something for nothing.
The Tragically Hip is a popular Canadian band. Not well known outside Canada, but revered here. Front man, Gord Downie, has been diagnosed with brain cancer and the band has decided to do a farewell tour. The ticket after-market displays a good deal about both how people think and should think.
Given circumstances, the tour will not be a forever thing. There will be a limited number of engagements. Ticket supply is therefore short. On the other hand, demand is strong. Tickets sell out nearly instantly. In classic economics, when demand exceeds supply, the price rises and reaches equilibrium. At some price, supply will equal demand.
That equilibrium price is well higher than the issue price. Triple at least. $166 fast becomes more than $500. I would have thought $300 would be enough to deter purchase for most, but I see I have misinformed myself. There are many fans crying foul. Maybe they should, but there is little clarity. Some expect government intervention.
What can we learn?
- Government intervention is the first resort of the powerless and is typically an imperfect solution. Even if you ignore the glacial pace at which they do anything. If you will recall, Ontario’s government made ticket reselling for a profit legal a few years ago.
- Many people deal with disappointment poorly.
- The band could have priced the tickets at least double and kept the money instead of giving it to the resellers.
- Capitalism does not please everyone. Those who see it to be a way to distribute scarce goods will see the justice here while others will assume the system is wrong because it does not meet their needs. Reality is that the latter group don’t meet the system’s needs.
As always, individuals who want things must decide what they are willing to give up to get it. All of economy relies on a trade. The system never, under any circumstances, delivers up free things.
Some people want the government to fix things. The flaw in that system is that some people believe free exists. It does not. The government can hide who pays though. The rule to remember is that if someone gets something for nothing, there is someone else who gets nothing for something.
How long do you suppose the nothing for something crowd will continue to play the game?
If you want Hip tickets, you may be forced to give up part of your vacation spending this year, work Saturdays for a while, go deeper into debt, move to a cheaper apartment, sell the car, or give up drinking.
It is always a trade. Part of being an adult is knowing what to trade, when and for what.
Don Shaughnessy arranges life insurance for people who understand the value of a life insured estate. He can be reached at The Protectors Group, a large insurance, employee benefits, and investment agency in Peterborough, Ontario. In previous careers, he has been a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.
Please be in touch if I can help you. firstname.lastname@example.org 866-285-7772