Here are some headlines from the 2007 Miley Cyrus tour. This is the one where she toured as both herself and her alter‐ego, Hannah Montana, in what of course was called “The Best of Both Worlds Tour”

There’s a NYTimes article from the time, where it describes a “distressingly consistent pattern: At 10am on a Saturday, tickets go on sale, and by 10:05am, all tickets are sold. Yet by 10:05, StubHub and other ticket exchanges already have a plenitude of tickets listed for the sold‐out event – only now they cost much more."

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When I say “the internet broke the old equilibrium”, here’s what I mean in a graph.

Before, we had supply and demand, the market clearing price, the “too low” price, and the rectangle depicted the “Money Left on the Table” by the artist or sports team. But with a frictionless resale market, this “Money Left on the Table” becomes what, to a ticket broker, or a college kid, etc. sees as FREE MONEY! And what happens when you give away free money? What economists call RENT SEEKING. Going to extreme lengths, often at extreme cost, to get your piece of the free money

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The market has a whole has been estimated to be on the order of $15bn Ticketmaster said publicly in 2011 that 20% of all tickets purchased in the primary market are resold, and that figure has surely gone up since 2011. They told me that in extreme cases, bots and other speculators could amass as many as 90% of the tickets for a particular event So basically, the FREE MONEY has been scooped up by brokers and the secondary market, and we’re now in a situation where “The secondary market is now the market”.

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Choice 1, the most standard economics choice, is to SET A MARKET‐CLEARING PRICE in the primary market.

Choice 2, is to set a below‐market price in the primary market, but then have most of the “real” allocation happen in the secondary market. Brokers will scoop up a lot of the under‐priced tickets in the primary market for resale on the secondary market.

Choice 3 is to set a below‐market price in the primary market, and BAN RESALE.

The key point I want to emphasize is that what’s NOT A CHOICE is to set a below‐market price, and then just hope and pray that fans will get the mispriced tickets, and there won’t be a fervent secondary market.

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It relies on “names on tickets” with some sort of customer identifier, like an ID, a credit card, or their phone. By analogy, like how plane tickets work Ideally, there would be some scope for refund for customers whose plans change, and can cancel far enough in advance that someone else can purchase and then utilize the ticket

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Allow artists and teams the choice to restrict resale for some or all of their tickets. Fee Transparency. In both the primary and secondary market.