Tuesday, March 17, 2009

Jay Leno disses the free market

This is an amusing story, good for generating class discussion. As I understand it, here are the facts:

1. Comedian Jay Leno takes his show to Michigan to help "not just the autoworkers -- anybody out of work in Detroit."

2. He gives away tickets for free.

3. Someone tries to sell his ticket on eBay.

4. Mr Leno objects.

So I wonder: If a person down on his luck prefers the cash to the opportunity to watch Leno live, why would Leno object? Is it altruism that is really motivating Leno here? Is he really sure that the unemployed person in Detroit would be better off with an evening of laughs than $800 in his pocket? Or does Leno want to play to a live audience of unemployed workers so he will seem altruistic to his television audience?

Absent externalities, markets improve the allocation of resources. Both the buyer and the seller of the ticket must be better off: otherwise they would not engage in the transaction. The only significant negative externality that I can see here falls on Mr Leno himself. In other words, Leno's objection to the eBay sale is an understandable and fundamentally self-interested act in that the sale impedes his abilty to appear selfless.


Update: Via my email inbox comes a reader who claims specific knowledge of the situation:

While searching the internet I came across your article on the Leno-Palace tickets on ebay. Yes, I was the seller. While I never thought it would get to the point of what it's become, you are right. Being unemployed I would rather have the money from the tickets sold to help me. I do feel if Mr.Leno wanted to help the ones down on their luck, he shouldn't object to someone trying to help me. I just wanted to comment on your article, this whole situation just makes me chuckle.
I wish him luck in finding a buyer, despite Mr Leno's objection and eBay's ban.