Taylor Swift Fans Reveal Their Eras Tour Ticket Prices Case Study

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.

Case Background and Information

Lest you have recently lived under a rock, we trust you have heard about Taylor Swift, an American singer-songwriter and superstar who recently visited Australia (only Melbourne and Sydney), having a massive economic impact while doing so. If you have not heard about her, you can read up on her here.

It turns out that there are a number of interesting issues here, involving economics (it’s complicated!), the law, and corporate social responsibility. During this assessment, you will be asked questions pertaining to these three disciplines and you will have to answer them based on the readings provided below, in the case information, and the concepts that you learned during the lectures so far. You may use, but are not expected to use, additional readings.

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.

d) Currently, in NSW, s 58G Fair Trading Act 1987 (NSW) reads: 58G Prohibition on ticket resale profit

1) The first purchaser of a ticket must not sell the ticket to any other person for an amount that exceeds the original acquisition cost of the ticket. Maximum penalty-1,000 penalty units (in the case of a corporation) or 200 penalty units (in the case of an individual).

2) A person (other than the first purchaser) must not sell a ticket to any other person for an amount that the person knows, or ought reasonably to know, exceeds the original acquisition cost of the ticket.

Maximum penalty-1,000 penalty units (in the case of a corporation) or 200 penalty units (in the case of an individual).

Suppose instead scalping is fully legalised, with no limits on how many tickets scalpers can buy and no limit on how much above their purchase price they can resell them for. Suppose when the tickets first sell at $200, a scalper buys a large share of them. The tickets quickly sell out. Later, at the concert, fans observe that many seats are empty, even though the concert was officially sold out. How can legalised scalping explain these empty seats? Given your answer to this question, why might scalping reduce economic surplus?

Question 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? (Hint: Answer is in Air BnB’s terms of service 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?

Scenario 2

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?

Scenario 3

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?

Scenario 4

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)?

Question 3

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.

b) Use the deontological approach to evaluate the actions of accommodation providers during Taylor Swift's concerts.

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