Editorial: The Mission Concert, starring Supply and Demand

Phil Collins' Mission Winery Concert in Hawke's Bay next year is sold out, creating demand for tickets.

Scalpers chancing their arm to sell concert tickets for several times their value are doing just that, chancing their arm.

They are testing the basic law of supply and demand.

A few weeks ago a Mission Estate Phil Collins' concert ticket was on Viagogo for $2500. It's gone - perhaps snapped up by a rich millionaire who just can't do without his or her Phil Collins' fix next February?

Or is the same ticket now selling for $1840 this week, because the demand just isn't there, not at $2500 anyway.

Dr Eric Crampton is an economist who finds concert ticket pricing "fascinating".

"It is hard to find any other area where retail prices are regularly low enough to cause shortages at the posted price."

Crampton suggests that concert tickets might be deliberately low priced, to ensure a wide cross section of audience attendance.

The original, standard ticket prices for the Mission concert were $150 for a General Admission.

The concert has sold out, creating demand. It is a one-off event unless fans want to travel to Christchurch.

The current market rate for a Mission concert $150 GA ticket is sitting at roughly double the ticket's original price.

Three online auctions over a few hours on a Sunday evening saw three "double passes" sell for $600 plus.

Which doesn't mean that the tickets should have been priced at $300 in the first place.

It simply means that the present (limited) supply and demand has established a market price of double the original asking price.

Or in other words, something is worth whatever someone is prepared to pay. Supply and demand.

It doesn't stop indignation at the morally questionable practice of buying multiple tickets and then selling them as "I'd love to be there but I just can't make it".

One point - demand is key in these situations.

Having been in the position of having two extra tickets to a concert, I sold them at a loss just to offload them, and delivered them to the new owner outside the concert gate.

The concert wasn't sold out. Demand was low. So was my ticket price.

The new owner looked at me and said solemnly ''I am sorry for your loss''.

I was too, but I couldn't complain - supply and demand.