Fans scramble for Lady Gaga tickets
Summary of the news:
Lady Gaga “The Born This Way Ball” was held at the Asia World-Expo on May 2 with
the tickets priced HK$480, HK$780, HK$1,280 and HK$1,580. Fans of Lady Gaga
scrambled for those 14000 tickets by various methods.
Introduction:
Lady Gaga is a super star who attracted many fans go to her first concert, “The Born
This Way Ball” in Hong Kong. The concert tickets released to the public are
insufficient to satisfy all the fans’ wants. From the above situation, we can apply two
main economic concepts – economic goods and excess demand to this news.
Economic Analysis:
Economic Goods
The tickets of ‘The Born This Way Ball’ are known as economic goods. The features of
the economic goods include:
1) More is preferred to less
Lady Gaga is a super star that a lot of people, especially her fans are willing to see
in concert. They scramble for the tickets, and many desire for more tickets. From
the news, we know that a local music publicist has been allocated six tickets, but
the number of tickets she wants is eight.
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2) Competition exists
In order to get the tickets, people compete among themselves and are willing to
pay a price for them. The competition involves price and non-price competition.
The price competition refers to a higher price paid while the non-price
competition refers to other ways except price to obtain the tickets. From the
news, the non-price competition for the tickets is the internal booking and the
credit card priority booking systems. Some people, just like the local music
publicist in the news, are allocated some tickets from internal bookings. The
cardholders of American Express can enjoy the chance they make first booking
for the tickets. The scarcity of the tickets implies competition in society. Thus, any
criterion of competition is discriminatory. Competition according to the market
price is a discrimination against those who cannot afford the price. Competition
by internal bookings and credit card priority bookings are systems that
discriminate against those who do not have a relationship with the production
company or are not the cardholders of American Express. The chance of the
wider public getting tickets is therefore lowered.
3) Opportunity cost is involved
Due to scarcity, we have to make a choice. Whatever choices are made there is an
opportunity cost. For the fans of Lady Gaga, the opportunity cost of buying the
concert tickets includes the maximum value one can get from the alternative uses
of their money and human resources involved. For example, the other uses of
money are savings or shopping, the other use of human resources is working.
Besides the money cost, there is a time cost. Some fans decide to book the
tickets through the customer service hotline on their mobile phones. However,
the hotline will be very busy, so they may need to give up their work to buy the
tickets. Time cost and money cost are required for getting Lady Gaga tickets. The
full cost concept is applied.
Excess Demand
The diagram below is the demand and supply curves of Lady Gaga’s concert
tickets.
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From the graph, the supply curve is vertical while the demand curve is downward
sloping. When the ticket price is $1580, the quantity demanded is larger than the
quantity supplied; there is an excess demand for the tickets. An excess demand is a
situation in which the quantity demanded is larger than the quantity supplied when
the price is set below the equilibrium price.
Conclusion:
The news “Fans scramble for Lady Gaga tickets”, illustrates the economic concepts of
economic goods and excess demand. We can study human behavior under the
situation of excess demand. Some are willing to buy a ticket with an additional
HK$205 for each, while others are not. It depends on their willingness to pay. In
addition, 6,000 seats out of 14,000 are allocated to the American Express
cardholders. It is a discrimination against those who are not cardholders of American
Express.
In order to solve the problem of excess demand, we think that the production
company of the “The Born This Way Ball” can increase the number of concerts or
raise the prices of the tickets. These are effective solutions to excess demand.
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