Landsburg often asked why theatre and concert tickets aren't more expensive -- why do we see aftermarkets of scalpers rather than just market clearing prices to start with. A number of explanations have been offered. My favorite had been something like the following: queueing produces a different audience mix than would, say, a ticket auction with market clearing prices. The audience comprised of poorer folks who are Fans (with a capital F) produces a different concert experience for the attendees, possibly raising the average price for a ticket that people are willing to pay, and also likely raising the probability that a concertgoer will purchase CDs after the concert.
With the shift to file sharing and MP3s, artists will need to shift from using concerts to promote CDs to using recordings (distributed legally or illegally) to promote concerts. Consequently, artists will need to appropriate more of the surplus from their shows as they won't get it through CD sales (or at least that route is attenuated). Small bit of evidence in today's news: Ticketmaster in Canada is about to begin having online auctions for tickets. Ticketmaster claims it's doing so at the request of the artists. The story is available here: http://www.canada.com/national/story.asp?id=A0A5C11F-2D72-43D6-96D2-0A35E4DD1A45 The hole in the story I give above [different audience mix from queueing enhances CD sales] is that while it can explain why we might see queueing for concert tickets, it doesn't explain why we see queueing for theatre tickets, or for popular restaurants and such. That one still puzzles me, though Cowen has some insights on his blog at http://volokh.com (search on "why movies don't cost more on Saturday night". Eric Crampton
