Free market economics

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Re: Free market economics

Postby Eric » Fri Dec 02, 2011 4:14 pm

5280MeV wrote:If the large scale art was all there really was, then I would have really enjoyed 2011, and I would remember the experience forever, but I would not go back. It is great, but it is not enough - it is the juxtaposition of creativity at all scales which invites me to be a part of it, and beckons me to come back and do more, make more, and be more a part of it. The fact that the playa is so inhospitable also creates the magic, dropping me down so many rungs of the hierarchy of needs that when a random person hands me a plain hot dog on a bun it is like some sort of miracle has occurred and I am about to have the most delicious meal of my life.


I am just going to throw an "amen" in here. That pretty much sums up why I keep going.



As for the people who still want to panic about this... well, until the draw actually happens everything from both sides is conjecture. Some of us think it will work out fine, some think it won't (and some think it will destroy the event!, but those people think that about something every year).

These are the facts on the ground:

The event sold out last year.
The LLC is trying a different method of ticket sales this year.
The LLC believes there will be a sell-out this year, and thinks this is the fairest way to give the most people a chance at a ticket.
The LLC thinks that most people who want tickets will get them, based on previous years growth.

Now, you can take that info & Freak The Fuck Out, or you can take it & plan for the change. I would place a cash bet that the vast majority of people who want a ticket will get one (for $420 +shipping or less). Having an official LLC- approved resale market will take the wind out of the scalpers, so, unlike last years ticket-hunt fiasco, tickets should stay way more reasonably priced.

The lottery system has been tried before (though under different names) by other events- like that little Glastonbury thing people keep bringing up. It works when demand is greater than supply, but "working" doesn't mean everyone ends up happy. Just that most do.
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Re: Free market economics

Postby pink » Mon Dec 05, 2011 3:56 am

Eric wrote:
5280MeV wrote:If the large scale art was all there really was, then I would have really enjoyed 2011, and I would remember the experience forever, but I would not go back. It is great, but it is not enough - it is the juxtaposition of creativity at all scales which invites me to be a part of it, and beckons me to come back and do more, make more, and be more a part of it. The fact that the playa is so inhospitable also creates the magic, dropping me down so many rungs of the hierarchy of needs that when a random person hands me a plain hot dog on a bun it is like some sort of miracle has occurred and I am about to have the most delicious meal of my life.


I am just going to throw an "amen" in here. That pretty much sums up why I keep
.

I say amen too. One of my favorite moments amongst many was after literally being the last person to make it up to the platform of the man on Friday before some dehydrated drunkwad passed out up there and necessitated us all to evacuate so they could figure out how to get medical up and the idiot down, and hearing classical music. I walked around one of the towers at the base and there's a guy playing a cello. And I'm marveling at the logistics of bringing a cello to the playa, and lugging it out to the man and keeping it in tune while listening to some amazing and totally unexpected music, watching the skydivers float down at the same time. When he finishes, a woman who was also listening asked him if she could sing a melody with him. He starts playing something jazzy, and she starts singing scat with a pure voice of the type I only have in my dreams.

And that is the kind of experience I go to BM for. And I am one of those people that just believes I'll get a ticket. And if less pessimists are there..... Won't ruin my Burn.
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Re: Free market economics

Postby junglesmacks » Mon Dec 05, 2011 7:23 am

As stated before, 2012 is a piece of cake..

What I'm most interested in is whether or not the BMOrg sees this is a permanent solution set in stone, or more of an experimental-let's-just-give-it-a-whirl-for-2012.. and how in 2015 when demand is 4 times that of available tickets how that will play itself out..
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Re: Free market economics

Postby InGearX » Mon Dec 05, 2011 4:33 pm

junglesmacks wrote:..and the price of cheese in Zimbabwe? What will the lottery do to that?

well per Image - http://en.wikipedia.org/wiki/Butterfly_effect it will have an effect :)

probably will cause the price to increase - as higher prices for BM ticket - effectively cause many other things to be higher...
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Re: Free market economics

Postby Rice » Mon Dec 05, 2011 4:42 pm

InGearX wrote:
junglesmacks wrote:..and the price of cheese in Zimbabwe? What will the lottery do to that?

well per Image - http://en.wikipedia.org/wiki/Butterfly_effect it will have an effect :)

probably will cause the price to increase - as higher prices for BM ticket - effectively cause many other things to be higher...


That formula is pretty!

Not quite sure how chaos theory applies to Burning Man ticket prices :shock:
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Re: Free market economics

Postby forty_eight » Mon Dec 05, 2011 6:16 pm

If you were a scalper, how do you think the lottery would impact your approach/business model for BM tickets?

With so much consternation by actual intending participants, it would seem scalpers would be just as - actually more - thrown off. Question being: how are scalpers going to forecast their margins?

If the aftermarket takes shape as an active market with plenty of face value tickets available over a considerable amount of time, the impetus for scalping could be fairly well mitigated.

The scarcity existed before the lottery, so the longish supply curve of the new approach would seem to help disrupt speculation that would certainly have been unleashed in a first come, first served model.

Market economics (self interest) might be human nature ... "free" market economics, not so much. To the contrary, I'd say.
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Re: Free market economics

Postby BBadger » Tue Dec 06, 2011 2:30 am

I don't know how scalpers could get a reasonable forecast in anyway because it was only last year that the event sold out, and even then, it was only a few weeks before.

My prediction is that there will be a lot of people who will be surprised by just how many tickets are still available during the March sale. It may sell out but the only people who will not get a ticket and be surprised by this are the same kind of people who were surprised by last year's sell-out. Those people can suffer what few scalpers may be around trying to sell their ticket to a relatively hard-to-attend event.
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Re: Free market economics

Postby Brxdfw » Wed Dec 07, 2011 2:06 pm

I'm curious whether anyone here personally knows anyone who did not go last year because they could not get a ticket? Not those who couldn't afford one or people who could not get their shit together, but who just could not find a ticket at all. My hunch is that there are not many -- maybe none.

My belief is that this year there will be enough tickets for everyone who really wants to go and is prepared and able to go.

Second, if the bmorg opposes selling above face value because they want to keep it affordable, why do they raise the price every year, this year by 15%? Even when the average price is already much higher than the cost to produce BM?

And finally how many millions are paid to Larry Harvey each year to license the BM name and logo?

I'm not at all opposed to Larry Harvey profiting, but I'm offended that the bmorg tries to prevent anyone else from benefitting from the natural economic principle of supply and demand. I know this runs counter to the almost universal view of burners, but a free market is one of this country's basic tenets. And the folks in charge of bmorg are definitely profiting.

IF there is a shortage, then the free market will solve the problem through rising prices. There is no reason to try and circumvent this natural, universal law, and it can't be done anyway. If there are tickets available on the "official" resale site, then they will be purchased by speculators who will then sell them at a profit. There is nothing wrong with this. And the end result is that everyone: a) who wants to go and b) is able to go and c) can afford to go will get a ticket.
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Re: Free market economics

Postby trilobyte » Wed Dec 07, 2011 3:50 pm

Personally, I know of three people who didn't go because they weren't able to get a ticket.

Prices don't go up every year. In fact, this is the first increase since 2009. Even with this year's increases, I don't believe the total revenues are actually that much higher than the costs of producing the event. As for "how many millions are paid to Larry Harvey each year" the answer is none. While he does get a salary and income from the BMOrg, it's not in the millions. He and the other founders will receive some kind of payout at the end of the transition to the Burning Man Project (at the time that they gift the event and all it's IP to the Project), but my understanding is it's more of a modest retirement and won't turn them all into multi-millionaires.

Scalping and price gouging may be within the limits of the law, but it's exploitation. Of fellow participants, no less. If you see nothing wrong with it, that's a real shame.
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Re: Free market economics

Postby forty_eight » Wed Dec 07, 2011 5:20 pm

Since last year did sell out making actual scarcity an actionable concept for Burning Man participation, the possibility for an early rush on tickets by speculators (scalpers) is a real threat in this year's ticket market. Speculation creates fake demand and drives the value of a commodity up without a rational basis. The pre-sale, lottery and open sale cadence gives time for true intending participants to queue up and possibly get their ticket(s) before potentially speculative forces drive up ticket values. To me, the lottery is making a lot of sense.

I'm not sure why anyone thinks free markets are a natural phenomenon. Try naming a few?

In my view, the "market" will begin to sort itself out in the open sale. By that time, the majority of participants should be set and the remaining participants will have a stable market. Once the open sale runs it course, we'll see how many particiapnts are still needing tickets and what happens to the prices. By that time, the participant pool is, theoretically, smaller representing signifcantly dimished demand that would be more congruent with actual supply, and the worst of speculation will have been avoided.

But, I never believed deregulating the energy sector was going to a boon for the consumer. The actions of Enron and the ensuing rolling blackouts in California show what a happens to commodity in a truly unregulated "free" market. Artificial supply interventions occurr, prices are driven up and consumers get the shaft while profits are made hand over fist. Market forces are important, but proper market structures are typicaly required to maintain a rational basis for value, especially when the commodity revolves around a siginificant public interest (like Burning Man - haha).

Regulation isn't a bad thing; it just has to be done right ... and that is the tricky part!!

We'll see how this structure plays out, but for now, I am pretty confident in what actions have been taken.
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Re: Free market economics

Postby Eric » Wed Dec 07, 2011 5:56 pm

Brxdfw wrote:I'm curious whether anyone here personally knows anyone who did not go last year because they could not get a ticket? Not those who couldn't afford one or people who could not get their shit together, but who just could not find a ticket at all. My hunch is that there are not many -- maybe none.


I know of at least four who didn't go because they couldn't find a ticket. Most of them gave up looking in early August as they didn't want to be that person who's trying to pull everything out of no-where at the last minute. All four were willing to pay (slightly) above face, none of them were willing to pay scalper prices.
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Re: Free market economics

Postby theCryptofishist » Wed Dec 07, 2011 7:46 pm

Another vote for a "free market" being more a myth than anything attainable. The market works best with a level playing field--provided by government regulation and oversight, and with as much transparency as possible. The llc-sponsored resale market will provide this. If people, scalpers and buyers both, want to operate outside this apparatus it is their prerogative. The llc cannot prevent this.
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Re: Free market economics

Postby Igneouss » Thu Dec 08, 2011 2:41 am

Alot of moot discussion here...
As far as anyone can tell the number of people that failed to get in last year was small. My guess is maybe 1% of total population (order of magnitude anyway). Analysis needs to recognize that the internet and media in general make these sorts of problems seem much larger than they actually are in the real world. All media tend to distort reality. This board included. For example, the few people that didn't get tickets post tons of excited statements during the process. But you do not see a similar weighted number of posts from people that had no problems (that would be about 99 'no problem' posts for each 'yes problem' post).

Imagine if a smilar percentage of happy people posted. It would completely swamp any negative discussion and everyone here would have a completely different view.

But the 'yes' people do not post nearly as much becasue it lacks heurism. The 'no' people post lots because they want to affect the outcome. Result: distorted view from this board.

AND other media pick up the story. 99% got in is not heuristic, no story. But the 1% 'OMG it's sold out! I can't get a ticket! My life will never be the same!' makes for a classic media story.

Now you have a feedback loop of stories and board posts and blogs etc that all slant in a specific direction. They all feed on each other. Everyone talks about the situation in these terms. The slanted view takes on a certain amout of false reality as a result.

2012

1) It is pretty likely that everyone that wants a ticket will get a ticket but not certain.
2) Unfortunately, we have a new slanted approach to discussing failure to obtain a ticket. Various people and media writers are already thinking about stories discussing the sell out 2012. Just a matter of time until we see 'Will it (is it) Sold Out?' in the media. We already see that on this board.
3) The LLC is a bit hog tied since they very much do not like to discuss ticket sales numbers. As a result, one possible scenario is that board/blog/media noise discusses a sold out condition while the LLC denies that the event is sold out, all the while reports that tickets are not available flood the various media outlets and the LLC refuses to give specifics... This process has already started.
4) It is pretty much a certainty that after all sales are over there will be loud complaints about a sell out regardless of weather it actually happens or not. There will be, and have always been, people that fail to obtain a ticket. In the past the reason varied. The new default reason for failure is 'sold out'.
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2005 $243K
06 $855K
07 $1.0M
08 $1.1M
09 $0
10 $1.1M
11 $1.2M
12 $1.2M
That’s $6.8M that thousands of volunteers deserve to know about. Capitalism is alive at BM. Tickets are the commodity. Others have estimated higher profits.
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Re: Free market economics

Postby JStep » Thu Dec 08, 2011 10:21 am

While I agree in principle on some of your points, a couple things;

Where are you getting your metrics for the number of people who couldn't get a ticket? I don't think there's any way to measure this, it's a complete unknown. It could be just a few hundred people, or it could be thousands of people.

And while I agree that the dissatisfied are exponentially more vocal than the satisfied, your logic is assuming that the total number of people (satisfied and not) have the opportunity and willingness to read and post on eplaya. I think it's pretty well known that the vast majority of people related to BM either as attendees or otherwise do not even browse ePlaya, much less post on it.

Not that I have a dog in this fight, really. I am just fascinated by the discussion.
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Re: Free market economics

Postby A Jester » Thu Dec 08, 2011 12:57 pm

Igneouss wrote:Alot of moot discussion here...


I found your entire post to be full of good points, the one I quoted stands out as the best. OF course that didn't stop me from continuing it....


Brxdfw wrote:Second, if the bmorg opposes selling above face value because they want to keep it affordable, why do they raise the price every year, this year by 15%? Even when the average price is already much higher than the cost to produce BM?

That's interesting, what's the difference and where did you find those numbers?

And finally how many millions are paid to Larry Harvey each year to license the BM name and logo?

Oh, I see you're mad that people are on your bridge. In that case, I'm also mad that people are on my bridge. I read that last year Larry Harvey got paid $462 million for licensing fees. He also got a huge consulting fee, probably about the same amount, but that wasn't disclosed.
Image
I'm not at all opposed to Larry Harvey profiting, but I'm offended that the bmorg tries to prevent anyone else from benefitting from the natural economic principle of supply and demand. I know this runs counter to the almost universal view of burners, but a free market is one of this country's basic tenets. And the folks in charge of bmorg are definitely profiting.

IF there is a shortage, then the free market will solve the problem through rising prices. There is no reason to try and circumvent this natural, universal law, and it can't be done anyway. If there are tickets available on the "official" resale site, then they will be purchased by speculators who will then sell them at a profit. There is nothing wrong with this. And the end result is that everyone: a) who wants to go and b) is able to go and c) can afford to go will get a ticket.


Yeah! We should let the free market run it's course. Of course, that will probably mean that tickets will hit a few thousand dollars, counterfeiting will be the new black, and ePlaya will turn into one huge whinefest because so many vocal people will be priced out of the event.
I see you are still mad at the people on your bridge, WHY WON'T THE GET OFF YOUR BRIDGE!? And you're correct, nothing can stop tickets going for several thousand dollars, counterfeit tickets running amok, and the enormous birth of whiners on ePlaya.[1]






[1] well, that probably is a universal law....
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Re: Free market economics

Postby forty_eight » Thu Dec 08, 2011 2:18 pm

Another thing on free markets ... free markets are talked about for their theoretical efficiency at finding the right price. As most economists will tell you, the most efficient market structure is an auction.

Imagine the massive freakout if ALL the BM tickets were put on eBay! Haha
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Re: Free market economics

Postby junglesmacks » Thu Dec 08, 2011 2:46 pm

48_love wrote:Imagine the massive freakout if ALL the BM tickets were put on eBay! Haha



:shock: :shock: :shock:
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Re: Free market economics

Postby JStep » Thu Feb 02, 2012 11:15 pm

And you guys said I was crazy!

http://www.sfbg.com/pixel_vision/2012/02/02/burning-man-ticket-fiasco-creates-uncertain-future

Not that I think "all is doomed" or any of that crap that gets slung when someone has a concern about the ticket process this year, but it's helpful to know my speculation a few months ago on here was not completely unjustified.

Losing theme camps, large art, art cars and other ambitious projects will be highly detrimental to the event in the long term.

Our regional group is currently exploring participation in the CORE Project and so far I know of 2 people confirmed for tickets in our group of about 35. I'm sure I will hear of a few more in the coming days but it's not looking good right now and if Brown Paper Socks or whoever does the tickets has the same problems with the open sale that they had for the opening sale last year I don't think we'll ever hear the end of it.

Ah well, greetings from sunny Nebraska! I'm heading to Da Bar.

This is my official "I told you so!" ... I'm done with this, now it's time to start the work of figuring out if we can even go.

Moving on...
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Re: Free market economics

Postby theCryptofishist » Fri Feb 03, 2012 10:23 am

JStep wrote:Losing theme camps, large art, art cars and other ambitious projects will be highly detrimental to the event in the long term.

It could bring back some aspects of the early days.
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