'Paperless Ticketing' and its Impact on the Secondary Market: Antitrust Implications

Abstract

“Paperless Ticketing” refers to a transaction where the purchaser uses her credit card to get into an event instead of having a ticket, PDF, or mobile phone scanable file. As implemented by TicketMaster, the secondary or resale market of tickets originally sold by TicketMaster must go through TicketMaster’s own resale site, TicketExchange (or its wholly owned sister site, TicketsNow). Preventing other platforms like StubHub, RazorGator, and the like from being used severely limits the resale market. In an empirical study of over 1,600 tickets, some sold as “Paperless Ticketing” tickets and others sold as conventional tickets, the price in the secondary market for the “Paperless Ticketing” tickets was nearly $100 higher than comparable conventional tickets sold. In addition, the quantity of “Paperless Ticketing” tickets available and sold in the secondary market relative to comparable conventional tickets was about 10 percent. In other words, the supply of “Paperless Ticketing” tickets available for sale in the secondary market was much lower and the prices were much higher. This is consistent with the theoretical findings, and standard economics findings, of downstream attempted monopolization by an upstream supplier.