Ticket scalping: is this illogical?

[chezlaw]

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It's similar to winning a satellite to a 10k event that you wouldn't normally play. You should sell the seat if at all possible if you weren't comfortable playing it in the first place.

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I think that's an excellent analogy. And I think it also provides an example in which most people are behaving irrationally.

matt

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its illustrative of a common mistake amongst 'rational' people. They confuse maximising happiness with maximising something they can measure easily.

For many people paying the ticket price and going, or not going at all are the the optimal solutions and to do anything else would be silly - especially if its because of peer pressure from so called 'rational' people.

BTW DS knew I was ging to say this

chez

[chezlaw]

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It's similar to winning a satellite to a 10k event that you wouldn't normally play. You should sell the seat if at all possible if you weren't comfortable playing it in the first place.

[/ QUOTE ] good analogy. This is very true for a professioanl trying to maximise value but much less true for an amateur having fun

chez

[ZeeJustin]

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It's similar to winning a satellite to a 10k event that you wouldn't normally play. You should sell the seat if at all possible if you weren't comfortable playing it in the first place.

[/ QUOTE ] good analogy. This is very true for a professioanl trying to maximise value but much less true for an amateur having fun

chez

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I disagree. That 10k can provide MUCH more entertainment if used in a more responsible fashion. A lot of it has to do with their delusion of thinking they actually have 10k worth of equity, or close to it. Obviously I'm not talking about rich people who couldn't care less whether or not they come across an extra 10k. I'm talking about the average family man that wants to save up so that his kids can get a decent education.

[chezlaw]

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It's similar to winning a satellite to a 10k event that you wouldn't normally play. You should sell the seat if at all possible if you weren't comfortable playing it in the first place.

[/ QUOTE ] good analogy. This is very true for a professioanl trying to maximise value but much less true for an amateur having fun

chez

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I disagree. That 10k can provide MUCH more entertainment if used in a more responsible fashion. A lot of it has to do with their delusion of thinking they actually have 10k worth of equity, or close to it. Obviously I'm not talking about rich people who couldn't care less whether or not they come across an extra 10k. I'm talking about the average family man that wants to save up so that his kids can get a decent education.

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May well be true for your 'average' familly man as well, but its not always true.

Unless you claim its always true then we're not in disagreement as my contention is that maximising happiness in these scenarios is not identical with maximising value ( I agree that for many they coincide)

edit: thoughts some more about your average familly man and I suspect you're very wrong about him - playing with his earnt 10,000k is likely to be a huge mistake whereas playing with the won 10k may be okay - thinking explaining your logic to the missus will help is likely to be an even bigger mistake:

'Darling you'd let me play if I won the buyin so logically ....', 'you don't love me any more she now mysteriously deduces'

Monty

[ZeeJustin]

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It's similar to winning a satellite to a 10k event that you wouldn't normally play. You should sell the seat if at all possible if you weren't comfortable playing it in the first place.

[/ QUOTE ] good analogy. This is very true for a professioanl trying to maximise value but much less true for an amateur having fun

chez

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I disagree. That 10k can provide MUCH more entertainment if used in a more responsible fashion. A lot of it has to do with their delusion of thinking they actually have 10k worth of equity, or close to it. Obviously I'm not talking about rich people who couldn't care less whether or not they come across an extra 10k. I'm talking about the average family man that wants to save up so that his kids can get a decent education.

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May well be true for your 'average' familly man as well, but its not always true.

Unless you claim its always true then we're not in disagreement as my contention is that maximising happiness in these scenarios is not identical with maximising value ( I agree that for many they coincide)

chez

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My definition for value is only slightly different from my definition of happiness.

Unless you mean $ value, in which case what you are saying is obviously correct.

[chezlaw]

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It's similar to winning a satellite to a 10k event that you wouldn't normally play. You should sell the seat if at all possible if you weren't comfortable playing it in the first place.

[/ QUOTE ] good analogy. This is very true for a professioanl trying to maximise value but much less true for an amateur having fun

chez

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I disagree. That 10k can provide MUCH more entertainment if used in a more responsible fashion. A lot of it has to do with their delusion of thinking they actually have 10k worth of equity, or close to it. Obviously I'm not talking about rich people who couldn't care less whether or not they come across an extra 10k. I'm talking about the average family man that wants to save up so that his kids can get a decent education.

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May well be true for your 'average' familly man as well, but its not always true.

Unless you claim its always true then we're not in disagreement as my contention is that maximising happiness in these scenarios is not identical with maximising value ( I agree that for many they coincide)

chez

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My definition for value is only slightly different from my definition of happiness.

Unless you mean $ value, in which case what you are saying is obviously correct.

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Then your calculations need to include how people enjoyment of the event will be influenced by how much they paid for it and the manner with which they paid. I suspect we more or less agree.

chez

[ZeeJustin]

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Then your calculations need to include how people enjoyment of the event will be influenced by how much they paid for it and the manner with which they paid. I suspect we more or less agree.

chez

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Yeah, 2 things to add.

1) People often just don't think of the possibility of reselling what they have purchased or won.

2) If people were better at making rational long-term decisions, many more people would resell the ticket, or sell the tournament seat. People tend to take instant gratification over more rational decisions.

[chezlaw]

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Then your calculations need to include how people enjoyment of the event will be influenced by how much they paid for it and the manner with which they paid. I suspect we more or less agree.

chez

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Yeah, 2 things to add.

1) People often just don't think of the possibility of reselling what they have purchased or won.

2) If people were better at making rational long-term decisions, many more people would resell the ticket, or sell the tournament seat. People tend to take instant gratification over more rational decisions.

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1) I agree

2) True but people also make the mistake of too much long-term planning instead of enjoying life.

chez

[pzhon]

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It's similar to winning a satellite to a 10k event that you wouldn't normally play. You should sell the seat if at all possible if you weren't comfortable playing it in the first place.

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I think that's an excellent analogy. And I think it also provides an example in which most people are behaving irrationally.


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It's analogous with the OP's situation, but it's not a clear demonstration of irrationality. There are ways this could be rational.

If I have a bankroll of $50k, possibly distributed among several investments, I might decide I'm not bankrolled to pay $10k for an event, or it is too much of a hassle to get $10k in one place. However, if you give me an additional $10k cash, maybe that's enough for me to go for it. That would justify not buying in, but playing instead of selling a seat. Similarly, perhaps I haven't budgeted for this concert. Perhaps it would be a pain to get the extra cash. However, if you hand me another $200, then I might be willing to pay.

Another way to rationalize this is information. If you have a lottery ticket you bought for $1, and you didn't watch the drawing, would you sell it if someone offered to buy it from you for $100? Of course not. Would you buy a lottery ticket from someone for $0.10 after the drawing? No, not even for 1/1000 the cost at which you wouldn't sell. Does winning a satellite tell you that your chances are better than if you lose the satellite, but find $10,000? If so, it might be rational to keep what you have.

Many people make irrational decisions, and it could be that the above justifications are not good explanations for people's decisions. If you give them A, then offer the chance to switch to B, they will behave very differently than if you give them B, then offer the chance to switch to A, even though the choice is the same: A or B.

[luckyme]

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I don't think the decrease in marginal value of dollars has an effect here - we're not talking about a huge sum of money relative to my net worth, income, etc.

matt


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To avoid the smokescreens of pleasure, long-term planning and other nitpicks and tangents your friend grabs the $50 ticket out of your hand, stuffs $250 into your shirt pocket and runs across the street.
He yells, "ok, still want the ticket... it's yours for $250 ."

Does that prove his point? Money is just a medium of exchange, so are other easily traded commodities, tickets at game/concert time are like chips in a casino.

luckyme