COMM1100 - Business Decision-Making Case Study Analysis

Assignment Task

In this assessment you will apply the tools and concepts you have learned and developed in the first half of the course to analyse a business case. Tutorial activities in Weeks 1-7 provided an opportunity for you to practice the skills needed to complete this assignment.

Policy on the use of generative AI

Use of generative AI software is allowed (but not required) for this assessment. Any output of generative AI software that is used within your assessment must be attributed with full referencing. Possible acceptable uses of generative AI software include improving the writing and argumentative style of your analysis or using AI assisted translation software to translate a first draft written in another language into English.

Question

1. a) Not all Taylor Swift tickets were originally sold at the same price: prices ranged from as low as $80 for back row seats, to more than $1000 for VIP seats that included merchandise. What can explain why some seats were sold for more than other seats?

b) Suppose 400,000 tickets are sold across Taylor Swift’s Australian shows. For simplicity, assume each is sold at a price of $200, and the concert sells out. In the weeks and days before the concerts, a secondary market emerges, with some of these 400,000 tickets being advertised for sale and purchased (illegally) for prices as high as $4000. Does this indicate that $200 was greater than, less than, or equal to the market clearing price? Explain.

c) Explain why allowing a secondary market like the one described in (b) may increase economic surplus, relative to what surplus would be if reselling a ticket was not possible. Give an example of a trade between a ticket buyer and seller which, if it were to occur, would increase surplus. Make sure to include the buyer and seller’s reservation prices and the amount by which surplus increases if they trade.

2. Scenario 1 You have booked an apartment through Air BnB for two nights while you are in Sydney to see the Taylor Swift concert. Less than a week before the concert the host contacts you to cancel the booking. They tell you the previous guest was charging their e-bike inside when the battery caught fire and caused a lot of damage. As a result, they have to cancel bookings for the coming month as the apartment is being repaired.

a) Will Air BnB help you find alternative accommodation? In the circumstances do you think Air BnB’s approach to the problem is satisfactory?

b) Same facts as Scenario 1 but when you arrive in Sydney before the concert you decide to have another look at Air BnB and Stayz. You discover the apartment that you had booked, but the host had cancelled, is advertised for twice the rent you had agreed to pay. Clearly, there was no fire. Is this a breach of the Australian Consumer Law (ACL)? Are you entitled to a remedy?

3. Assuming scalping has now been made fully legal in New South Wales. You buy a ticket to the Taylor Swift concert from a scalper. When you go to the venue you manage to get in to see the concert but you discover another concert goer also has a ticket to the same seat as you.

c) Which of the following parties can you sue, and which can you not sue. Provide reasons on the basis of contract law

• Taylor Swift’s management company?The venue? 
• The person who is already occupying the seat? 
• The scalper who sold you the ticket?

4. Merchandise sellers sign licence agreements with Taylor Swift that give them permission to sell authorised Taylor Swift merchandise. The agree, as a condition of being granted the licence, that they will not sell any unauthorised merchandise. One of them disobeys this and offers ‘Genuine Taylor Swift merchandise’ branded T-shirts and soap for sale with their own deceptively similar but fake version of the ‘Taylor Swift’ signature.

d) Does the sale of either product breach a registered ‘Taylor Swift’ trademark?

e) Does the sale of either product breach the Australian Consumer Law?

A customer asks a merchandise seller who is offering Taylor Swift children’s long-sleeved Tshirts for sale whether they are made of fabric that will prevent their child from getting sunburnt while they wait in line for entry to the concert. The seller replies; this T-shirt is exactly what you need. As the label states, it is ‘sun safe’. We know the Australian sun can burn a child’s skin quickly. That’s why we are selling her long-sleeved T-shirts in children’s sizes. The sale is made, the child immediately changes into the new T-shirt. Two hours later the child has severely sunburnt arms under the T-shirt. f) Does the claim made by the merchandise seller breach the Australian Consumer Law (ACL)?

For these questions, the decision makers are the Airbnb hosts (i.e., the decision to cancel bookings). In other words, the Tylor Swift concert itself is just background context. a) Identify two market stakeholders and one societal stakeholder in Airbnb hosts' decision to cancel bookings at the last minute ahead of the Taylor Swift concert and discuss the interests and concerns of each stakeholder group identified.

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