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Tuesday, September 27, 2005

Ticket Prices for Denver Broncos

With the Denver Broncos current win and almost flawless game against the Kansas City Chiefs, one of my friends is already preparing to see the Bronco’s go to the Super Bowl. My friend is also expecting the repercussions of the win to affect ticket prices dramatically!

I see her point from an economic stand point and Denver has experienced it in previous years. If a Super Bowl win increases the Broncos’ popularity, which it has, then we could find ourselves in a shortage over Broncos’ tickets. This is just a simple supply and demand analysis; when the demand increases, we find ourselves in a shortage. As a result, the market price for Broncos’ tickets will most likely increase.

The cost for Bronco’s tickets has already increased after the new Invesco Field was built to replace the old Mile High Stadium. If the additional costs for tickets don’t appeal to Broncos’ fans this too would have an effect on the demand curve; we’d also see an increase in ticket scalping. There are many factors that play into pricing tickets and it is hard to predict exactly how this particular situation will play out.

I am puzzled.
If we buy wheat (or wheat contracts) and sell it later, we call that the futures market and a wonderful way to share risk.

If somebody buys gasoline and then sells it a higher price due to a shift in supply and demand, we call that "price gouging", whatever that is.

If somebody buys tickets and then re-sells them (or fails to resell them due to low demand), we call that scalping.

Seems to me that what is good for one market should be good for all. If there are empty seats in the stadium, the price was too high. If the stadium is turning people away, they obviously had too low a price.

Is there really a difference between these markets?
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