The Economics Lab - Great opportunity for a thesis here

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The Economics Lab - Great opportunity for a thesis here

Postby Igneouss » Mon Jan 30, 2012 3:12 am

Economists know lots about perception and scarcity and desire as applied to a specific commodity. The current ticket situation is a classic opportunity for graduate student research.

Here's what I think is the case (it would be fascinating to see if some one could pry real numbers out the BMorg):

- In 2011 BM sold out. Some people were not able to obtain tickets. While the numbers were likely small, the agrieved were very vocal (as you would expect of burners).
- This in turn resulted in inflated expectations in the resale market (scalping), and an example of how inflated expectations can affect reality (some tickets sold for silly high prices).
- This in turn caused the BMorg to tinker with the sale system (primary gaol to inhibit scalping, control resale market).
- Unintended consequence of changes (lottery) is an increase in perceived uncertainty among buyers.

Note that the number of failed purchases in 2011 was likely small and that the increase in available tickets for 2012 is significant. BMorg is able to predict demand fairly accurately (if not shame on them) so they know how many tickets they are likely to sell to a fair level of accuracy (noting permit limits as well).

So this year:

- Heightened uncertainty results in an unexpected amount of hedging. Burners find ways to register for more tickets than necessary in hopes of reducing uncertainty.
- Lots of burners are capitalists. Once the physical tickets go out the BMorg has little control over the fate of the commodity.
- Scalping will occur.
- Confusion will occur.
- Future feeling of uncertainty will be increased.
- BMorg will 'rethink' the current ticket system and implement different changes for 2013.

The truely interesting element is that there are probably enough tickets to go around this year. All of the above is driven by the false perception of scarcity.
Basic b/e analysis:
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: The Economics Lab - Great opportunity for a thesis here

Postby lemur » Mon Jan 30, 2012 5:24 am

previous population increases might help to determine expectations for this year

2005 to 2006 about 7% increase
2006 to 2007 about 15% increase
2007 to 2008 about 6% increase
2008 to 2009 about 10% Decrease (the only large decrease in the events history)
2009 to 2010 about 15% increase
2010 to 2011 about 5% increase

(unless my math sucks this comes out to about an average of 6% increase each year)

(some of these increases are surely limited by BM selling things at gate or not/or in other ways)

there is 57,000 tickets offered for sale in 2012.. that would allow for about 5% increase in population from 2011 to 2012..

the question is: has the heightened public awareness of burning man exceeded that average 6% increase?!

in the past we had two big jumps of 15% more people wanting to come to the burn than the previous year

if this is one of those years (and it very well could be a 5% year.. or even larger than 15%!) and we have 15% more than 2011 wanting to come in 2012 that would leave 5,000 people in the lurch without a ticket being available no matter what they were willing to pay..

If it ISNT one of those years.. well.. ........ we will see, wont we?
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Re: The Economics Lab - Great opportunity for a thesis here

Postby Igneouss » Mon Jan 30, 2012 5:34 am

I suspect that the 57k number is pretty close to the BLM permit max. There will not be any larger increase in attendance due to the permit. One point I have not followed/studied: BMorg was in the process of negotiating the next permit. If I recall, 2011 was under a temporary permit as the regular permit was still under negotiation. It may be that the new 5 year permit has been issued.

These permits are public info and constitute a data source that the BMorg cannot hide.
Basic b/e analysis:
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.
User avatar
Igneouss
 
Posts: 503
Joined: Sun Jan 25, 2009 12:27 pm
Location: Sterling VA and Twickenham, Middlesex, Eng.

Re: The Economics Lab - Great opportunity for a thesis here

Postby Igneouss » Mon Jan 30, 2012 5:37 am

I suspect that the 57k number is pretty close to the BLM permit max. There will not be any larger increase in attendance due to the permit. One point I have not followed/studied: BMorg was in the process of negotiating the next permit. If I recall, 2011 was under a temporary permit as the regular permit was still under negotiation. It may be that the new 5 year permit has been issued.

These permits are public info and constitute a data source that the BMorg cannot hide.
Basic b/e analysis:
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.
User avatar
Igneouss
 
Posts: 503
Joined: Sun Jan 25, 2009 12:27 pm
Location: Sterling VA and Twickenham, Middlesex, Eng.

Re: The Economics Lab - Great opportunity for a thesis here

Postby lemur » Mon Jan 30, 2012 5:43 am

i would GUESS that the next permit will put a 60k max over the next 2 years...judging by the previous permits.. (the previous was 50k)

this would allow 5% each year from 2011 to 2012, and 2012 to 2013.. ..which is in line with the 6% per year increase they stipulated in the 'five year operating plan'

yep yep!!

i dont think the latest permit has been announced yet.. We will be sure that it will appear on the BM website (and elsewhere official places) when it does!!

indeed.

ok.

indeed.

yeah!
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