17 December 2010

ShmooCon ticket prices, Economics 101, and B-Sides from a non-economist

ShmooCon ticket prices, economics 101, and B-Sides from the perspective of a non-economist (me) attempting to show the perspective of an economist (got it, right?):

Observations:

  • 1,050 $150.00 ShmooCon tickets sell out in 15 seconds
  • Many people who wanted to buy tickets have been unable to do so
  • Tickets are selling for considerably more than their face value on eBay.

Economics: In a market situation, price equilibrium occurs when supply and demand are equal.  That is, at the intersection of the supply and demand curves.

Conclusions: In a purely market situation, ShmooCon tickets would sell for more (perhaps considerably more) than their $150 face value.  Let's say for sake of this example that the market value is $300.  This is the value to the consumer of listening to interesting infosec talks.  Persumably, prices are held artificially low as a benefit to those who are able to attend to make it more affordable.  However, this artificial price control to reduce price itself contributes to driving up demand.  Someone who could not afford to attend if the ticket costs $300 may now be able to attend if it costs $150.  This is a situation that economists would call "excess demand."

The market's response to excess demand is that suppliers want to supply more products to consumers.  More supply would bring the price closer to equilibrium.  So ShmooCon should sell more tickets.  But they don't want to get any bigger.  So the market will seek out other suppliers.  FireTalks, B-Sides, or other alternate venues, constitute that supply.  These alternate venues aren't necessarily selling a ticket, but they are providing interesting infosec talks and thus providing a value to the consumer.
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