Idea for future ticket distribution: auction?

[snardy]

So obviously demand for BM tickets is higher than the prices offered by the BMorg. Otherwise, the scalpers would never have a chance.

Has the BMorg ever considered using a dutch auction to sell tickets?

This would allow the BMorg to capture any premium individuals are willing to pay.
In a dutch auction, individuals would privately submit their maximum highest bid. The BMorg would then sell all the tickets at the 'clearing price' - i.e. the lowest price at which all the tickets sell out. This encourages everyone to bid honestly and would allow the ticket situation to be settled many months in advance, giving everyone plenty of time to make preparations.

The BMorg could, of course, continue offering Low Income tickets and any other special ticket distribution programs (e.g. tickets to certain theme camps, tickets for artists) to ensure that the social goals of the event continue.

[junglesmacks]

[glitter-mouse]

the scalpers would never have a chance.

there might be a few pro scalpers who bought tickets, but most were bought by burners trying to game the system or at least trying to increase their odds of getting at least tickets for themselves.

the vast majority of so-called scalpers out there are regular burners who would really like to sell them at face value, but ultimately respect the supply & demand commerce model. their extra ticket or two will supplement their journey. it's really a victimless crime. both parties are happy in the end.

[snardy]

the scalpers would never have a chance.

he vast majority of so-called scalpers out there are regular burners who would really like to sell them at face value, but ultimately respect the supply & demand commerce model. their extra ticket or two will supplement their journey. it's really a victimless crime. both parties are happy in the end.

Huh? No one likes to pay more than the face price.
Find me a person who enjoys paying greater than face value and I'll call that person a fool to their face.

While the scalper will be using the proceeds to "supplement their journey," it's taking away resources from the "journey" of the person who paid above face value to the scalper. I'm not exactly sure how you can argue that scalping is a "victimless crime."

It's not.

[glitter-mouse]

I'll call that person a fool to their face.

no need to get aggressive. you'll never attract a husband with that kind of attitude.

[theCryptofishist]

So the prices at which tickets are sold are not the prices which individual names, but the price at which 50,000 burners would all buy tickets?

[Trishntek]

I'm not seeing how that would alleviate the issue of 20k people having no ticket to purchase. i.e. how would that deal with demand being greater than supply?

[theCryptofishist]

I guess he thinks that the people who didn't get tickets would console themselves with the thought that they couldn't afford them.
I don't see much virtue either. The screaming by first tier buyers shut out of the system... And the real concerns about making it an event for the rich...

[glitter-mouse]

And the real concerns about making it an event for the rich...

it's been an event for the rich since 1999 - the white rich (whoops did i say that or just think it?).

[snardy]

I guess he thinks that the people who didn't get tickets would console themselves with the thought that they couldn't afford them.
I don't see much virtue either. The screaming by first tier buyers shut out of the system... And the real concerns about making it an event for the rich...

Sorry, but do you really think the 1st Tier tickets actually go to those who can only afford 1st Tier? Those who got Tier 1, even before the lottery system, got them out of sheer dumb luck. It had nothing to do with being able to only afford 1st Tier. A buddy of mine got a pair of 1st Tier tickets this year via the lottery - he makes over $400K per year as an entertainment lawyer. I know he's an extreme example, but people will pay the lowest amount offered to them (even if they can afford more).

We have the LIT program for those who can't afford a regularly priced tickets. The BMorg could increase the number of tickets for that program, if they went to an auction system.

I'm not a fan of the tiers, simply because they never really were based on need. It was more about how quickly you could register for them.

With an auction, you'd eliminate tiers and I venture to guess that the average price per ticket would roughly remain the same as now. However, it would push most scalpers out of the market because they would be afraid of buying the ticket at a high price and not being able to attain a significantly higher-than-market price for the ticket.

Of course, we would not even need to contemplate using a Dutch auction system if the BMorg decided to go to a Will Call-only, non-transferable system. It now appears that 2012 will be a test run for that system, as 25-35% of tickets will be done through Will Call, STEP, early admission, LIT, and camp distributed ticketing. It looks like they are testing the capacity limits they have. I wish them good luck!

[snardy]

And the real concerns about making it an event for the rich...

it's been an event for the rich since 1999 - the white rich (whoops did i say that or just think it?).

[snardy]

I'm not seeing how that would alleviate the issue of 20k people having no ticket to purchase. i.e. how would that deal with demand being greater than supply?

It would not alleviate any capacity concerns. However, any premium bid up by Burners would go into the account of the BMorg (i.e. stay within the community) rather than lining the pockets of scalpers.

[junglesmacks]

I'm not seeing how that would alleviate the issue of 20k people having no ticket to purchase. i.e. how would that deal with demand being greater than supply?

It would not alleviate any capacity concerns. However, any premium bid up by Burners would go into the account of the BMorg (i.e. stay within the community) rather than lining the pockets of scalpers.

..because they need more money.

[theCryptofishist]

Sorry, but do you really think the 1st Tier tickets actually go to those who can only afford 1st Tier? Those who got Tier 1, even before the lottery system, got them out of sheer dumb luck.

Of course first tier didn't go only to the less well off. However, what you're talking about is having a small chance or having no chance. You may not think there's a difference, but to the people directly concerned, I bet there's a significant one.

[snardy]

I'm not seeing how that would alleviate the issue of 20k people having no ticket to purchase. i.e. how would that deal with demand being greater than supply?

It would not alleviate any capacity concerns. However, any premium bid up by Burners would go into the account of the BMorg (i.e. stay within the community) rather than lining the pockets of scalpers.

..because they need more money.

I'd rather it be given to the BMorg to spend more on art grants, LITs, better facilities, more capacity at the gates, greater capacity for the entire event, more hired professional staff, a bigger Man to burn, safety/medical staff, etc.

The alternative is giving the premium to scalpers. 'Eff that. Keep our money in our community to finance a bigger & better event.

[snardy]

Another option is to do a modified Dutch auction where the price you bid is the price you pay, regardless of the minimum clearing price.
If someone wants to pay $600/ticket, they will have a 100% chance of winning the tickets at that price.

However, someone who bids $275 will probably also win, but they will be closer to the minimum clearing price. That allows even more premium to be captured by the BMorg, while also preserving the price breaks for those who can't afford as much. This is an equitable system, while also preserving the social goals of the BMorg.

There's many different types of auctions the BMorg could implement.

[wh..sh]

A buddy of mine got a pair of 1st Tier tickets this year via the lottery - he makes over $400K per year as an entertainment lawyer.

*in a sexy, melting voice*
Your buddy... hows he doing?

[snardy]

A buddy of mine got a pair of 1st Tier tickets this year via the lottery - he makes over $400K per year as an entertainment lawyer.

*in a sexy, melting voice*
Your buddy... hows he doing?

He's heading to Burning Man (for the third time) with his gorgeous wife.

[munkycmunkydoo]

This sounds interesting, but in essence is what we have now. Pardon the term, but really this all boils down to a cost benefit analysis on behalf of the burner. As with every year, but more so this year one had to really ask "what can I afford in ticket price to go to BM?"

As a full time student who is/was unemployed, and who has been effectively homeless within the last year, I really deliberated on what I could afford, or even if I could afford to go this year. After missing last year by a week (I finally had $ for a ticket, after rounding everything else up, literally the day the sell out hit and prices doubled), and after the year I have had I was fairly committed to this year, almost a "no matter what" commitment. This is the discussion I had with all of my burner friends. The simple answer was at what ticket price would you no longer be able to to go, period. To that end I budgeted and decided I could make sacrifices throughout the year to cover the $150.00 difference in tiers. When I signed up for the lottery I put in for all three tiers, and won at 390. (406 shipped). I was really excited to win and then scared that I had 5 dollars left to my name.

The majority of burners I know who didn't get tickets through the lotto admittedly only put in for the lowest tier(s) and figured they would buy in March. Some of these folks specifically told me not to do this. All of my friends told me that while I would have a solid application for a LI ticket, I should also think about the demand for this year and expect that if I didn't get a ticket through LI process that I would probably miss this year too. All told I guess where I was going with this is that the ticket pricing (within reason) is not at all what is really impacting this year, it is availability. Outside of doubling the prices for tix I don't see a pricing scheme as a way to get tickets to match demand. The problem for most involved was radically underestimating demand, be it legit or inflated by scalpers. The Dutch auction does not alleviate the problems most have experienced because most would have probably bid close to lowest tier and been left out by the cutoff as apposed to randomness.

In the end I planned on at worst coming to the desert with 150 dollars less in art and gifts. Since I got my ticket things are a bit up, and I owe a lot (if not all) of it to the Burner community. I actually have very limited (not complaining) part time work right now, and that opening was offered to me by a Burner. That burner had heard through my friends and roommates about my situation and need for any work available. I have since earned back that 150, and a little more meaning that I should be able to come to the desert with more art and gifts. Making things even better, I have committed my availability and I might even be on our camps build crew, affording me more time away from defaultia this year.

So I guess maybe where I REALLY am going with all this is that what needs to happen to fix the ticket situation is a new infusion of community building commitment. All the things that screwed this years process comes down to making things convenient at the expense of community. We commit names to tickets, or we move to a window of entrance to BRC which requires folks to either be there for the time or leave early and miss the burn, or...

I don't know specifics really, but I do know that what drew me to Burning Man were the burners I have known for a few years and their commitment to BRC and more importantly the 10 principles. What I see as someone on the periphery is convenience creating conflict with that commitment on multiple levels (tickets, participants v. spectators, & weekend warriors).

Additional commitment is radically inclusive, because the invitation is there if one is willing to step up. Lotteries, pandering to convenience, and or more expensive tickets are not at all in keeping with radical inclusion.

[remi]

I like the fact that you brought up an idea that I have not heard yet on this forum, however, I don't think that the dutch auction style ticket distributation is right for TTITD. There isn't much of a scalping issue right now, it the scarcity issue. Non transferable tickets will deter scalpers just as easily, and won't make it look like they are favouring people with more income.

The only way I see to solve the scarcity issue is offering up more tickets. That is done by either purchasing land, or there may be a way to convince the dessert people into letting us have more people. Both those ideas have there own threads with plenty of pro's and con's.

[moonrise]

No dutch auction, no thanks.

[Eric]

Another option is to do a modified Dutch auction where the price you bid is the price you pay, regardless of the minimum clearing price.
If someone wants to pay $600/ticket, they will have a 100% chance of winning the tickets at that price.

However, someone who bids $275 will probably also win, but they will be closer to the minimum clearing price.

The second people figure out they can bid low and get a ticket, they will. It's human nature. The BMorg already learned that people will try to game the system in their favor, a Dutch auction is just asking for trouble.

[Dr. Pyro]

Can't there be a minimum bid, say $250? Or does that fly in the face of a Dutch auction?

[vargaso]

Another option is to do a modified Dutch auction where the price you bid is the price you pay, regardless of the minimum clearing price.
If someone wants to pay $600/ticket, they will have a 100% chance of winning the tickets at that price.

However, someone who bids $275 will probably also win, but they will be closer to the minimum clearing price.

The second people figure out they can bid low and get a ticket, they will. It's human nature. The BMorg already learned that people will try to game the system in their favor, a Dutch auction is just asking for trouble.

Dutch auctions work by encouraging people to bid somewhat higher than the lowest they think the median dollar amount would be in order to ensure a ticket. It's a very market-driven solution and one that works well for some occasions. It does favor those who can afford more, which may not jibe with the Burning Man ethos, I can't really tell anymore. There is no gaming a Dutch auction unless you're able to enter many multiple time over and attempt to drive up the median price, which would be diametrically opposed to what a scalper would want anyway.

I'm sure there are faults I'm not thinking of.

[gyre]

That isn't how ebay does dutch auctions.

But they don't understand how it works themselves.

[snardy]

The second people figure out they can bid low and get a ticket, they will. It's human nature. The BMorg already learned that people will try to game the system in their favor, a Dutch auction is just asking for trouble.

People won't low-ball since they will be afraid of being below the minimum clearing price. And those who can afford more - even afford A LOT more - are incentivized to bid higher-than-average to procure their tickets. The BMorg would capture the premia from those high bidding tickets (which, in reality, would be not be a ton of tix - all the bids would be distributed along a Bell Curve).

Those bids who do not meet the minimum clearing bid would then be allowed to enter the LIT program. They would still need to do an application and prove their resource constraints, but then the BMorg would at least know that they are really in need and not trying to game the system. Otherwise, they would have placed higher bids had they been able to afford them.

It's not a perfect system (that would be non-transferable tix with names checked at the gate!), however I think it gets us to conforming to the BM ethos of equal sacrifice and self-reliance

[snardy]

Can't there be a minimum bid, say $250? Or does that fly in the face of a Dutch auction?

Setting a floor price is not within the definition of a pure Dutch auction, however there's no reason the BMorg could not do it.

I think it's fine that people who can afford more would pay more. And those that can afford less would pay less, either by being near the clearing price or getting a ticket through an expanded LIT.

[bradtem]

There have been a few other threads discussing auction issues. Generally, a uniform price auction (of which the Dutch auction is one example) is regarded as the best system for pricing and selling something like Burning Man tickets. And this is well known, and the BMOrg was advised that this would be the case. However, there is a fear that selling tickets at auction is at odds with some of the community values. I am not sure that is true, or rather I believe it is somewhat true, but that the various other alternatives (lotteries, invitation etc.) are as much at odds with the community's values, if not more so.

Nobody knows, but I believe had about 35,000 to 40,000 tickets gone up for Dutch or sealed-bid Uniform Price, they probably would have sold for not much more than $400. In fact, it's quite possible they would have sold for less. (A floor of $325, Burning Man's target average price, would probably have been in place.) It would have been very simple. Those who bid more than $400 (or whatever) would have tickets. Those who bid less would not. Camps that wanted to stay together would have agreed to all bid the same price, and would have either all won or all lost. (They could have used internal subsidy if some important campmates could not afford this.)

However, it's possible the auction would have closed much higher, if demand is really that high. There would have been few scalpers. Scalpers have very little to gain in a uniform price auction. All they can do is hold tickets in the hope that last-minute buyers decide later that they really want to go. (They also can get some money from bidder's remorse folks who bid less than their true maximum. It is hard to find ways to convince people they really need to bid their true maximum.) I should also note that "Pay what you bid" seems like a good fundraiser but causes people not to bid their true maximum, and as such may actually lower revenue. In a Uniform Price Auction, all bidders pay the same, no matter what they bid, as long as their bid exceeds the final price, which is -- in the example above -- the 40,000 highest bid.

That is the interesting question -- what would the 40,000th highest bid have been? Clearly well over $240 and probably over $320. Probably not too much over $390. But you don't know until you hold the auction.

I have a different plan for next year, to try to marry the different desires within the BM community. That's to sell about 35,000 tickets in a UPA, and then take the surplus over what the event needs to operate and use it to subsidize the other 20,000 tickets, as well as to increase art grants. Say the event needs $17M. If 35K tickets sell at $450, that's $15.7M. The other tickets need sell for only $63 each to make the desired revenue target. I would sell these tickets for $100 each and they could be allocated in many different ways -- Theme camp/Art Car/Artist block, low income block and lottery or 1st come first served. The result is that people who are willing to pay the price go, and a large block of people who can't afford the market price also go, but must get through one of the filters described. The surplus ($750,000) I would put into art grants. The subsidized tix are probably non-transferable.

So far this is the best I have come up with to eliminate the shortage, make best use of revenue, eliminate scalpers, make sure those who want to go, go and not have the event be nothing but the wealthy.

I also am considering a plan to reduce bidder's remorse. The way to do this is to not ask for a bid, but rather to ask, "Name the number which to you is so high that you would rather not go if it costs this much." If you answer that question correctly, you should not have bidder's remorse. If it closes for more than that, you truly would rather keep the money than go. If it closes for less, you're going. That is a fairly high number, but I don't think there are more than 35,000 people for whom it is super high. But I don't yet know.

[snardy]

Great post, Bradtem! I love discussing these types of theoretical questions.

I feel that the BMorg probably chose the lottery, rather than an auction, for PR/optics purposes. It's easier for someone to accept that they didn't get tickets because of bad luck, rather than a lack of money/resources.
That said, I don't feel like either the lottery or the auction really conform to the BM's principles. How is dumb luck any indication of "radical self-reliance"? Tickets for the lucky ones, 'radical self-reliance' for the unlucky ones. It doesn't really make a whole lot of sense.

I really like your idea of using an auction for some of the tickets and subsidizing a large block of the rest. An auction combined with an expanded non-transferable subsidization program is totally compatible with the Burner ethos and still accomplishes the social goals of the event. I'd also like to see main theme camp leaders - who already spend a ton of time & money - get a cheaper ticket.

Good ideas, all around

[theCryptofishist]

How is dumb luck any indication of "radical self-reliance"?

There are nine other principles, you know. "Dumb luck" goes quite well with "immediacy" for example. The wonderful thing about the ten principles is that it's impossible to have them all completely. And the lottery reminds us that we are not in control, which is one of the things that the burn writes even larger...