The emergence of modern technology, via electronic tickets and online platforms like StubHub and Ticketmaster, allows sellers to effectively control the market, transforming reselling from a potential liability into an optimal strategy.
Q. What are the main takeaways from your research?
A. There has been a lot of debate about reselling, with two main areas of concern: First, there’s the question of how reselling affects sellers’ profitability. This led to some very vocal objections from artists. While this used to be a valid worry when reselling markets weren’t authorized, it’s not an issue anymore. In fact, today’s technology makes reselling the best strategy for sellers.
The second big concern is speculators. These are people who buy up tickets or other items early, hoping to sell them later at a higher price. Some see this as lost revenue for the firm, while others think it’s unethical. We argue that speculators can only swoop in when markets are inefficient, such as with rigid prices or high transaction costs. In a smooth-running market, speculators won’t be able to make a profit, so there’s no need to fear them.
Of course, markets are never fully efficient. But as technology keeps improving, markets should become more efficient. And that means we’ll likely see less speculation in the future.
Q. How does this apply beyond concert or sports tickets?
A. Resale markets can work in many industries that sell time-sensitive products, especially when customers’ needs change, and they may regret the initial purchase. Think airline flights, hotel rooms and cruises. While these industries often offer partial refunds, they could benefit from embracing authorized reselling.
Q. Good news for buyers and sellers.
A. Yes, very good news indeed! Technology has changed reselling in two ways. First, better allocation: It allows tickets to be redistributed more efficiently, benefitting sellers and buyers. Second, there is less fear of fraud: Transferring tickets is as seamless as booking an Uber ride.
