The recent controversy surrounding the dynamic pricing strategy adopted by the Manchester band Oasis and ticket sales platform Ticketmaster has sparked outrage among fans. Initially advertised at a maximum price of £150, the tickets for the band’s reunion tour soared to over £350 due to high demand, leaving many fans unable to afford them.
The backlash from fans was immediate, with complaints lodged to the Competition and Markets Authority and calls for a government consultation on ticket resales. A petition to ‘ban Ticketmaster in demand pricing’ garnered over 9,000 signatures, highlighting the discontent among fans who felt exploited by the pricing algorithm.
This issue of ‘price gouging’ is not unique to the music industry. US presidential nominee Kamala Harris recently proposed a federal law to prevent food companies from inflating prices, citing concerns about the impact on inflation. A survey conducted by Harvard Economist Stefanie Stantcheva revealed that voters perceive ‘greed’ as a significant driver of inflation, underscoring the broader implications of profit-making practices.
The debate over morality in profit-making dates back centuries, with historical references such as the Biblical prohibition of usury and John Calvin’s imposition of price caps on lending. The evolution of market capitalism has seen a shift towards individual rights and private enterprise, challenging traditional views on profit and commerce.
Despite criticisms of ‘greed’, companies like Walmart and Tesco have maintained relatively low operating margins, debunking claims of price gouging during the pandemic. Walmart’s strategic investments in logistics and automation have enabled it to meet rising demand while keeping prices stable, showcasing the role of ‘greed’ in driving innovation and efficiency.
In a similar vein, Oasis’s decision to add more shows at Wembley Stadium in response to overwhelming demand reflects the market’s determination of value. While short-term price increases may be challenging for consumers, they can also signal areas of opportunity and growth. The shift from moralistic views on profit to algorithmic pricing mechanisms like Ticketmaster’s underscores the changing landscape of commerce and consumer behavior.
As we navigate the complexities of profit-making and market dynamics, it is essential to consider the broader implications of pricing strategies and their impact on consumer welfare. The convergence of historical perspectives on profit with modern market forces highlights the evolving nature of commerce and the need for ethical considerations in pricing practices.