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Comment by somehnacct3757 | Hacker News Reader

I don't get what this has to do with combating scalping. This is just a new auction game to play. It levels the playing field for a time, as all new games do, but the scalpers will eventually win it.

In this case the game is to find X where X is the percent of concert goers willing to pay scalpers. Then you buy the bottom X% of tickets for the current price and list them for more money. This is easy to do because the auction site tells you the number of remaining tickets.

Since there's no supply of auction tickets left, scalpers can now set the price. And since they paid the lowest price out of any of the ticket holders, they hold all the power.

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The idea is that everyone willing to pay more than $X for tickets bought their tickets before the scalpers can buy it for $X.

X isn't the price in my solution it's the percent of concert hopefuls who will hold their nose and pay a scalper. Once there's exactly that many tickets left, there's no point running the auction anymore. Scalpers should use their bots to completely buy up all remaining tickets, as they do now, and then set them for a higher price on the secondary market.

Buying the first 1-X% tickets nearly guarantees you will pay more than the scalp price except for a thin band right before X where the prices are within the scalper's margin.

Basically this system only beats scalpers if everyone is richer than scalpers, which most concertgoers are not. If you're rich you might like the sound of this new system on paper but it's actually cheaper for you to stay with the current system and buy all your tickets on the secondary market.

Wait, they didn't choose to buy a ticket at the price the scalpers got (plus epsilon), so why would they pay more when the scalpers come around with a ticket?

Cuz the auction ran out of tickets so the price starts to climb as scalpers monetize FOMO. Regular purchasers don't know what the scalpers think X is for this particular concert. Even if you knew X, all you could do is try to buy a ticket right before the remaining quantity reaches X which guarantees you paid more than the scalper, but maybe not more than the scalper's resell price.

X is the moment scalpers buy up the remaining market and set their own prices now that they control the supply. They know many other ticket holders can't compete with them since they paid more money for their ticket.

Regular purchasers would learn to not try to game the auction like that any more. In the scenario you described, they are only losing out on tickets because they are getting greedy and trying to buy them for less than they think those tickets are worth.

The point of auctions is that the right strategy is to bid to your price, not to try to guess what other people think the price should be. That's why they work.

Again, X is not a price it's a demand level (for scalper tickets). Everyone can 'bid their price' and scalpers will still buy out the bottom of the auction and take control of the pricing.

Those hypothetical scalpers will indeed have control of the pricing, but they will have no customers willing to pay what they have paid, because all customers willing to pay more will have already bought tickets.

In theory, there may have been holdouts who wanted to get a better price, as you are suggesting, who then turn to the scalpers. Those holdouts are either (a) irrational for not bidding the price they were willing to pay or (b) not actually willing to pay whatever price the scalpers want to get.

By taking this strategy of picking a demand level X and buying out all the tickets once the supply is below that level, scalpers are virtually guaranteed to lose money.

For most goods, there is no demand that is independent of price.

The dutch auction doesn't solve the race aspect. There are plenty of situations where people can't buy tickets when they want - they're at work when the price is reached, driving, the webserver is at capacity, etc. Scalpers have the advantage in all these scenarios.

Secondly, people will pay more money once scarcity and FOMO kick in. I may want a ticket for $40 but scalpers knew X would happen somewhere around $50 so they bought all the tickets then. Am I not going to see the concert for $75 buying a scalper ticket? Not a straightforward decision to make! These are the sorts of inputs scalpers will consider when deciding X.

Even if people weren't actively under-bidding in the hope of getting cheaper tickets that way, human psychology might still mean that when faced with the acute and very real scenario of not getting any tickets (as opposed to the more abstract threat beforehand, when they're making their original bid), some people would subsequently then be willing to actually pay somewhat more than their initial bid.

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