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Chapter 10: Problem 7

An article in the Economist noted that for the Broadway musical Hamilton, "Every time the show's producers release a new block [of tickets] to sell, they immediately get snapped up by 'ticket bots,' high-speed ticket-buying software." The musical's producer called the ticket bots "computerized cheaters." a. How do people earn a profit from using the bots to buy tickets? b. Is there a strategy the musical's producer could use to eliminate the profit earned by the ticket bots? If so, why doesn't he use it?

Short Answer

Expert verified
People using ticket bots earn a profit by buying tickets at the initial price as soon as they are released and then selling them at a higher price due to increased demand. The producer could potentially reduce bots' profit by legal or technical measures, or by setting ticket prices closer to market levels. However, these strategies could be costly, technically challenging, or result in decreased accessibility for some fans.

Step by step solution

01

Understanding bots profit

People earn a profit from using bots to buy tickets due to differences in supply and demand. When a popular event like a Broadway musical releases new tickets, the demand usually greatly exceeds the supply. Bots can buy tickets as soon as they are released, before individuals have a chance. The people using the bots can then sell these tickets at a higher price. This is possible because they have essentially cornered the market on available tickets, creating a selling price (often significantly higher than the initial cost).
02

Outlining a potential strategy

There are several strategies that a producer could use with the goal to eliminate the profit earned by ticket bots. These include legal actions, technical countermeasures, or adapting ticket pricing. For example, they could establish rules and regulations that make the use of ticket bots illegal or implement technical measures to prevent bot purchases. However, these measures could be challenging and costly to implement.
03

Analyzing the producer’s hesitation

One main reason the producer might be hesitating to implement measures could be cost effectiveness. Building and maintaining a bot-resistant ticketing system might be expensive. Another reason could be fear of repercussions from a segment of clientele. If prices were increased drastically to eliminate the incentive for bots, it could make the tickets inaccessible to a portion of the fan base, leading to decreased overall sales or negative publicity.

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