21 January 2013

Allocating Inauguration Tickets

Greg Mankiw's Blog: Allocating Inauguration Tickets

Background: The Congress allocates free tickets to the presidential inauguration, often by lottery. Some winners of the lottery try to sell them for thousands of dollars. Senator Schumer objects to the resale.

Question 1: When David, a lottery winner, sells his ticket to Ann, both David and Ann are better off. Who is worse off?
I've concluded that once of the primary differences between me and most people, especially leftists, is how we view Pareto improvements.

David and Ann are better off, but Betty, who didn't/wouldn't/couldn't buy a ticket is not worse off. I think this is a good thing. Many others interpret this lack of improvement to Betty's condition as a de facto harm to him.

(Perhaps oddly no one seems to feel this way about the people who didn't win the lottery in the first place. Their failure to win is not commonly seen as a loss. I suspect the difference might be that in the lottery, Betty et al. didn't benefit because of chance, rather than because of the agency of Ann and David. This just makes me want to re-read The Lottery in Babylon, but that will have to wait until I get home.)


No one raises their child this way. No one would encourage their kid to feel wounded if a classmate is bettered and they aren't. We don't accept such childish emotions from actual children; I don't know why we encourage them amongst adults.


(Image by Nicole Ginelli)

10 comments:

  1. If we assume that by holding the lottery (rather than selling the tickets themselves), Washington is attempting to make the inauguration a more class-diverse gathering, then the victim of the sale is the inauguration itself. By selling the tickets, lottery winners make the inauguration more elitist, make inauguration attendance more biased in favor of the wealthy. If Congress has no problem with this, Congress should cut out the middleman and auction tickets directly.

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  2. Mankiw's follow-up questions deal with auctioning the tickets directly. I have no problem with that.

    Which is the more important goal: having inauguration attendance be random w.r.t. to income, or helping poorer people? If the former is more important, then fine. No selling tickets. (Although that still assumes that our collective desire for the inauguration to be a certain way should be allowed to trump Ann & David's individual desires to make a trade, which is a stance I find off-putting.)

    But if the latter is more important (and I think it is), then why should you prohibit a poorer person who wins a lottery ticket from selling it to a richer person if the poorer person would rather have cash than the ticket? More generally, why should we prohibit people who put a higher value on attending from taking the places of those who put a lower value on attending, irrespective of wealth?

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  3. "No one raises their child this way. No one would encourage their kid to feel wounded if a classmate is bettered and they aren't."

    I suspect that there are plenty of parents who feel this way themselves and thereby do in fact raise their children to feel the same way, either explicitly, or implicitly by example.

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    1. Hrmmmm. Okay, you're regrettably right. But at least most people wouldn't be proud of explicitly encouraging their child to behave this way. (I hope.)

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  4. If the goal is to help the poor, it'd be much more efficient and fair to just give them the money directly. (Or better yet, enact progressive tax reform and generous social programs)

    If we take your logic and run with it, the poor should be allowed to sell their votes.

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    1. Ummm... I'm a little confused. Obviously neither randomly distributing tickets nor allowing resale is the single best way to help the poor. I'm a little confused by your mention of tax policy and social welfare spending. I'm okay with either of them, provided they're well structured. But whether they exist or not, what bearing does that have on wether we allow Ann & David to transact a mutually beneficial trade?

      In regards to vote selling:

      (1) I don't think any potential collective desire to see inauguration attendance be a random sample of the population has the moral weight to trump Ann & David's individual desires. I do think that it's possible that a collective desire to see voting occur independently of income may carry enough weight to trump Ann's desire to sell David her vote.

      (2) This is a spurious comparison. The number of inauguration tickets is limited. They can either be given to the highest bidders, given out by lottery, given out by queuing, or given out to the friends and clients of the organizing committee. This is a MECE list of allocation methods for scarce resources. I have no reason to prefer any of the final three methods to the first.

      But voting is a not a scarce resource. We don't need any allocation; there's no reason not to let everyone do it. When you outlaw selling the tickets you're forced to choose one of the other three methods. If you outlaw selling votes, you aren't.

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    2. (2) Suppose rather than buy Ann's ticket, David pays a smaller amount pre-lottery, and *if* Ann wins, she will give him her ticket. By your logic, this should be fine. This removes scarcity and makes the issue comparable to vote selling.

      (1) Glad we agree. But your original argument wasn't based on the weight of inauguration attendence independence. It was based on Pareto improvement.

      Re helping the poor: Why (you ask) is it relevant that there are more efficient ways to help? We shouldn't use helping the poor to justify any random thing we want. As extreme example, imagine a policy that once a month, a forest is burned down, and the ashes given to a random poor person to sell. Is this policy good because it "helps the poor"? Of course not!

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  5. (1) I totally agree that "it helps the poor" isn't a sufficient reason to do something. My point was that if your primary concern is the welfare of the poor, then a random raffle still might not be the thing that maximizes their welfare.

    I still stand behind Pareto improvement as my primary reason to let Ann sell a ticket to David. Betty, Craig, etc. are not made worse off while Ann and David are better. If I'm interpreting your original comment correctly, you argued that we, collectively, were made worse off because we, collectively, wanted the attendance to have a random assortment of incomes. The reason I introduced the "moral weight" issue was to counter the reductio you made to vote selling, not to directly support the ticket sale between Ann and David.

    (2) I don't see how that makes the situation like vote selling. David giving Ann $1000 for a ticket, or $1 for her one-in-a-thousand chance of winning a ticket doesn't affect the scarcity of tickets. Even if you distribute tickets to people based on some byzantine combination of sales, lottery tickets, coin flips, raffles, queues, essay contests and scavenger hunts, there's still a limited number of tickets to go around. Only so many people can get into the inauguration location; there is no practical limit on the number of people who can vote.

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  6. Unless he lives very near DC, isn't a genuinely poor person pretty unlikely to be able to afford to go to the inauguration anyway?

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