The Price of Friendship, as Measured by Radiohead Tickets

This morning, I got a hurried whisper-screaming call from my good friend Jonathan C.:

“I. Have. Radiohead. Tickets.” He breathed. “Do you want one?”

If you don’t know what I’m talking about, Radiohead is a very, very popular UK rock band. Tickets for the band’s two New York shows, its first U.S. performance in 3 years, went on sale this morning on Ticketmaster and sold out in a couple minutes.

Radiohead is famous for doing price experiments with fans. At the height of illegal downloads, the band asked fans to pay-what-you-want for their album. They picked a small venue in New York — the Roseland Ballroom which accommodates 3,000 instead of Madison Square Garden which seats about 20,000 — and limited ticket sales to 2 per customer. But can limiting supply like this really stop a black market from emerging?

The answer is no. I checked Craigslist and there were already tons of ads. Economics tells us that limiting supply will only make price go up. I’m seeing average scalping prices right now — from $400 to $1000 for an $80 face value ticket. But what’s more interesting to me are the desperate buyers, not the sellers. Sellers just list the price they’d like for their goods, but buyers — many of whom don’t have that kind of cash — will start to barter in hopes that a seller is crazy enough not to take cash. This kind of thing is always fun for an informal study on people’s utility curve. The Gothamist has a good roundup of weird things people are offering/asking for (a soul, a date, or “priceless heirlooms or foreign treasures.”)

And of course, for a friend who’s so kind to offer me a ticket (not free, but at cost) I did the only thing I could think of: map his utility curve.

There were 2 conditions to his offer: arrive on time, and 100% commitment to going. Both of which were fine by me. I surveyed him to try to understand why he would give up $1000.

Did you consider selling your extra ticket?

Nope, I always had it in mind to give/sell at cost to a friend.

What was your criteria for the extra ticket?

My criteria for the ticket was, first and foremost, love for the band. Though ultimately the key factor is someone that will help me have a better time at the show. Oh yeah, and definitely bragging rights has something to do with it, but not sure how it has to do with my friend selection. The bragging rights come simply with being able to go to the show, not who I go with.

Do you expect us to become better friends?

Yes, I expect us to be better friends, because we’ll be standing in line forever!

Do I owe you something in return?

Yes, I expect that you will do me a big favor down the road! Like getting me tickets to see Bruce Springsteen or Taylor Swift. Or something.

And now, I’m going to price the friendship: How much would someone have to offer you for you to sell them my ticket, given that I’ve already accepted your offer?

Well, I will say that when you sent me that Craigslist link, I was like, “DUDE, I knew I could’ve gotten a lot of money for it, but not that much!!” But I didn’t actually think about doing so. Now, if you were to suddenly bail on me, I would consider selling the ticket, but I’d almost rather NOT make the money and have someone to enjoy it with me. But I guess once you put it that way, then you’re saying that I’d be willing to pay $900 to have a friend with me, that sounds a bit absurd. I guess if we were standing outside the venue, and some desperate fan who didn’t get a ticket offered me $2000, I’d probably sell mine right there and then. But I wouldn’t throw you under the proverbial bus (ie. sell your ticket), since that’d be really terrible of me. And since at this point, I consider the ticket “morally” yours, even if it’s still “legally” mine.


So there you have it folks: friendship is >$900. Radiohead ticket = $2000. What a great friend! I’m going to keep his last name to myself in case a reader out there does want to blow $2000, then Jon would be put in a hard spot and I might have to go to the concert with you instead of him.

Joshua Northey

Radiohead is a tremendous band. Great live too. My sister would probably assault someone for tickets if need be. Too bad I have to work out of state that day or I might have gotten us some.

As for scalping the easiest way to stop it is to simply require a name and photo ID when buying and using the ticket.

Just like an airline ticket. You don't see too many scalped airline tickets...

Of course the bands are not really that interested in stopping scalping because it does some of their work for them.

It would be awesome if there was a giant ticket auction so the band could keep all the surplus value the scalpers now capture. That type of thing is becoming possible with information technology.


In Finland, the scalping is prevented by making the tickets non-transferable (= your name is printed on the ticket) and making the event arrangers having to have a certain quota of tickets at box office. UK is even more strict in this issue: the event arrangers are required to check the name and photo ID on each ticket at the gate.

I do like Radiohead, but USD 2000 is a bit too much for the concert.

Mike B

I would advise you to get a new friend. Anyone who's utility curve is that messed up simply cannot be counted on to make proper life decisions. Do you really want to be sheltering this guy after he buys at the peak of the next housing bubble and ends up foreclosed because of it?


At a certain price, your friend could sell his tickets, then buy new ones back, go to the show and still make a profit.

John Glenn

This got me thinking about a (kinda) similar situation in the gaming world ; selling virtual goods for real-life cash (IE in Blizzard's immensely popular World of Warcraft, one would buy/sell gold for real US$). This kind of thing is illegal in most games, and all the surplus value went to big resellers (companies who buy a ton of gold and resell it for a profit).

However, in their upcoming hugely popular title, Diablo 3, Blizzard not only sanctions real-world $ trading, it embraces it in the game itself! In the actual game, you will have the option to put your items up for auction in either in-game gold or real-life $. Not only will this make transactions immensely more secure (guarenteed by Blizzard itself), but all the surplus value goes straight into the developer's pockets since they take a cut of each sale.

I think this is a great way to "control" a market in which there is obviously a huge supply/demand. It also gives Blizzard incentive to keep a balanced and fun game that will create a healthy market, and on top of that they get money from it, cash which it can reinvest in the game to create a circle of cash->development->more cash cycle.

Now, can the music industry find a similar system? As Joshua pointed, if that kind of technology was created, it would be a great way to get all that surplus value in the band's pockets, again giving them more of an incentive to create quality content. Obviously there's no perfect solution, but at least attempting something in that direction could be a good start.



My immediate thought is that maybe he doesn't want you to be just a friend...


If I were the guy being interviewed (the guy with the tix) I would say not that our friendship was worth $900 but that my word is worth that much and more (Psalm 15.4b).


I first read this and thought, 'Wow, that is a real friend right there.' Then I saw that the writer was a girl. I don't know about you, but I think that changes things a liiittle bit...


he just want to say that
"I don't want to be your friend,i just want to be your lover " from "house of card"

Alex Flint

It *is* possible that selling tickets below market prices could be economically rational behaviour by bands and festival organisers. Concert-goers may value a concert partly by the "fun-ness" of the audience, in which case the organisers would want to subsidise tickets for particularly fun people, particularly if the particularly fun people tend to be young and poor. I suspect this is partly why we see far-below-market pricing of these tickets. Of course, if the organisers reasoned this out properly they would subsidise tickets for fun people but not others, so either they aren't that smart, or they are worried about perceptions of fairness, or my hypothesis is wrong.


I have often wondered about the price an economist would give to a ticket that I have bought for say $100, would not want to buy for $200 or above for finding it too expensive, but because it is for a very precious event (say a soccer match of my favourite team against their all-time rivals) would not agree to seel it for say $600. I have been in this situation multiple times and cannot figure what is the value I give to those tickets...


I guess there could be a downside to scalping, inherent in the process. For example, if it's illegal (is it, in New York? I'm not sure) or barred by the vendor, you run the risk of forfeiting your tickets. There's also a rent cost, both in time to sell and the chance that you might get ripped off somehow. Both of these are pretty small in comparison to the amount of money we are talking about, though. I would definitely sell Radiohead tickets for $400. That being said, I'm flying internationally essentially to see a concert tomorrow, so I guess I shouldn't talk.
Also, minor quibble with your friend's answer: it's not clear that the ticket is still "legally" his; depends on whether he has made a gift to you, or just promised to do so. It seems like he's already made a gift (even though he's still holding the physical tickets), so you're probably in the clear even if he tries to welch out on you.