Economist's have long puzzled over why tickets for almost sure to sell-out concerts aren't sold for more and similarly why amusement parks don't congestion price their attractions.
Yet, at long last, concert promoters have started to do exactly this. Prime tickets for the recent Rolling Stone's concerts were sold for $500 and more, for example, (by the promoters not scalpers). Also this item http://slate.msn.com/?id=2067672 notes that amusement parks are now offering "go to the front of the line tickets" (complete with bodyguard to prevent other irate consumers from yelling at you or worse !). I suppose one could come up with explanations for why this used to be non-optimal but now is optimal (I await eagerly) but it seems to me that what these and other incidents teach (such as the auctioning of radio spectrum, for example) is that sometimes the best explanation for why something isn't done when economics suggests that it should be done is simply that people don't understand economics. Economists, in other words, have much to offer the world in new and better ideas. A certain amount of humility is certainly in order - so if something doesn't fit with economic theory we should look for explanations for why our theory could be wrong but we should also not denigrate our knowledge by assuming that what is, is optimal. (This theme is a prominent aspect of the book I edited, Entrepreneurial Economics: Bright Ideas from the Dismal science www.EntrepreneurialEconomics.org Of course you know that since I am sure you have all bought and read the book by now.) Alex -- Dr. Alexander Tabarrok Vice President and Director of Research The Independent Institute 100 Swan Way Oakland, CA, 94621-1428 Tel. 510-632-1366, FAX: 510-568-6040 Email: [EMAIL PROTECTED]
