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 Anne, both David and Anne are better off. Who is worse off?
Question 2: Senator Taxcut proposes auctioning off the tickets and rebating the revenue lumpsum to all taxpayers. Who would be better off? Who would be worse off? Which group is larger?
Question 3: Senator Deficithawk proposes auctioning off the tickets from the get-go to reduce the national debt. What are the pros and cons of that proposal?