Supply And Demand At Play In The Super Bowl
February 2, 2001
In any free market, prices equalize supply and demand. And nowhere was that more obvious than in the clamor for scarce Super Bowl tickets.
- Considering the demand, the face value listed on most Super Bowl tickets this year was a ridiculously low $325 -- which invited a secondary market involving ticket brokers, scalpers and online auction sales.
- So a week before the Big Game, tickets were selling from $1,500 to $3,500.
- The National Football League could raise ticket prices to market levels, but does not do so for public relations reasons.
Fans who won the right to buy Super Bowl tickets at $325 each in a lottery set up by the NFL generally decided to keep their tickets, even though they could make a few thousand bucks by selling them. And when asked if they would have paid $3,000 for a ticket if they had lost in the lottery, 93 percent of ticket holders said they wouldn't.
Richard Thaler, an economist at the University of Chicago, calls this phenomenon an "endowment effect." The value people place on goods increases once it is added to their possessions.
Source: Alan B. Krueger (Princeton University), "Economic Scene: Seven Lessons About Super Bowl Ticket Prices," New York Times, February 1, 2001.
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