Two Cheers for Touts

Stuart E Thiel

Scottish Journal of Political Economy, 1993, vol. 40, issue 4, 447-55

Abstract: A common belief among economists is that the activity of touts (scalpers) is unambiguously beneficial to the market. This note shows that that intuition is in general incorrect. Touts' presence in the market dilutes any individual's chance of obtaining a ticket in the original distribution. It is shown that if transactions costs cannot be pushed high enough to eliminate the resale market, the best policy is to leave touts alone. However, when possible, killing the resale market unambiguously benefits many ticket buyers, including some of the touts and their clients. Copyright 1993 by Scottish Economic Society.

Date: 1993
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Scottish Journal of Political Economy is currently edited by Tim Barmby, Andrew Hughes-Hallett and Campbell Leith

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