Do Anti-Ticket Scalping Laws Make a Difference Online? Evidence from Internet Sales of Nfl Tickets

Abstract

This paper investigates the relationship between state level anti-ticket scalping laws and online ticket scalping by examining transactions for National Football League tickets completed on eBay between 2002 and 2005. Despite limited enforcement of regulations in online marketplaces, the evidence suggests that ticket resale regulations do affect the structure of trade online. Stricter regulations were associated with fewer online transactions, a greater frequency of transactions that crossed state borders, as well as higher prices and markups in the secondary market. The evidence suggests that regulations may create significant opportunities for ticket scalpers to capture rents, and these opportunities seemed to be greatest in states that require resellers to be licensed. Over the time period studied, prices and quantities observed in states strictly prohibiting resale above face value became more similar to those observed in unregulated states. These observations are consistent with the idea that market participants updated their beliefs over time about the probability that scalping laws would be enforced online.

Keywords: regulation, ticket scalping, e-commerce

JEL Classification: L50, K42, K23