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High-Speed Ad Traders Profit by Arbitraging Your Eyeballs

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Re: High-Speed Ad Traders Profit by Arbitraging Your Eyeballs

#21

Post by skybrian »

ikeboy wrote: post #18
braythwayt wrote: post #12

Earlier quoted context omitted.

“Scalpers make Benefit X possible” says nothing about whether “Scalpers create Harm Y.” For example, you say "If reselling tickets was impossible and the price remained the same, then people who didn't manage to get one would be out of luck; now, they can pay more and still get one.” But if there is a fixed supply of tickets, then there are a fixed number of people getting tickets. All you are changing is which peopl…

>But if there is a fixed supply of tickets, then there are a fixed number of people getting tickets. All you are changing is which people get the tickets. To be precise, you're allocating the tickets to those who value them the most, under the objective criteria of "who's willing to pay the most for them" (which may not be fair, but in the same way that capitalism favors those capable of getting money). >But people w…

Okay as far as it goes, but the problem with that sort of analysis is that willingness to pay is only a good proxy for how much the ticket is valued for people with similar incomes. If you have enough money, being thrifty is optional. For someone barely breaking even, it's a requirement and there is a much higher threshold for spending money.

Taken too seriously, the result of ignoring this issue is absurdities like rich people caring more about anything they happen to spend money on than poor people care about eating.

Re: High-Speed Ad Traders Profit by Arbitraging Your Eyeballs

#22

Post by ikeboy »

skybrian wrote: post #21
ikeboy wrote: post #18

Earlier quoted context omitted.

>But if there is a fixed supply of tickets, then there are a fixed number of people getting tickets. All you are changing is which people get the tickets. To be precise, you're allocating the tickets to those who value them the most, under the objective criteria of "who's willing to pay the most for them" (which may not be fair, but in the same way that capitalism favors those capable of getting money). >But people w…

Okay as far as it goes, but the problem with that sort of analysis is that willingness to pay is only a good proxy for how much the ticket is valued for people with similar incomes. If you have enough money, being thrifty is optional. For someone barely breaking even, it's a requirement and there is a much higher threshold for spending money. Taken too seriously, the result of ignoring this issue is absurdities like…

Guess what happens if a rich man and a poor man try to eat in a restaurant.

Generally society's answer is to have the government give necessities to the poor, and otherwise let the rich buy what they want.

Edit: if you really want to untangle the money abstraction, look at it like this: person A has $X. They have $X because ultimately, other people gave them $X because A provided value to them worth at least $X. If they had a job, they got wages; if they sold a product, they got the sale; if it was A's ancestor's money, A's ancestor provided >$X value to someone or someones. (This is an abstraction, and obviously not always true; but we try to outlaw ways of making money that don't provide value to anyone, like stealing, or colluding with competitors. To the extent someone earned money illegitimately, that's a problem with how they got the money, not how they used it; the solution is to take away that money or prevent them from getting it, not prevent money from being used altogether. Also ignoring rents, interest rate/inflation, etc.)

So A's desire to pay $X to get a ticket is actually cashing in on society's "debt" to them of $X or the equivalent in happiness/utility. That's what needs to be compared with someone else who's only willing to pay some fraction of $X; the value they provided to society, that they're willing to give in exchange for the ticket, is less.

Again, obviously the abstraction is imperfect, but that's the ultimate justification for capitalism.

Re: High-Speed Ad Traders Profit by Arbitraging Your Eyeballs

#26

Post by bobbyi_settv »

braythwayt wrote: post #12
ikeboy wrote: post #7

Earlier quoted context omitted.

Scalpers provide liquidity, like most arbitrageurs. If reselling tickets was impossible and the price remained the same, then people who didn't manage to get one would be out of luck; now, they can pay more and still get one. Scalping is only possible when the market value of the ticket is more than the price charged, which means the demand will outstrip the supply.

“Scalpers make Benefit X possible” says nothing about whether “Scalpers create Harm Y.” For example, you say "If reselling tickets was impossible and the price remained the same, then people who didn't manage to get one would be out of luck; now, they can pay more and still get one.” But if there is a fixed supply of tickets, then there are a fixed number of people getting tickets. All you are changing is which peopl…

> All you are changing is which people get the tickets.

I don't think this is true. Without scalpers, a sold-out concert ends up with basically every seat filled. Since services like StubHub have gotten big, it is now more common for there to be many empty seats because those were snatched up by scalpers and never got bought.

The scalpers are often acting rationally here by holding out for high prices until the end instead of dumping their tickets because they make more overall that way even if some inventory goes unsold.

Re: High-Speed Ad Traders Profit by Arbitraging Your Eyeballs

#27

Post by aakilfernandes »

> Arbitragers win the first auction and resell the ad, finding exchanges where it’s more valuable and pocketing the difference

I don't understand how this is possible. The original advertiser has to trust that the first exchange is reporting accurate demographic info. How does the exchange know the demographic info is accurate if anyone can buy the ads and sell them on another exchange?

Re: High-Speed Ad Traders Profit by Arbitraging Your Eyeballs

#28

Post by ikeboy »

raverbashing wrote: post #20
ikeboy wrote: post #7

Earlier quoted context omitted.

Scalpers provide liquidity, like most arbitrageurs. If reselling tickets was impossible and the price remained the same, then people who didn't manage to get one would be out of luck; now, they can pay more and still get one. Scalping is only possible when the market value of the ticket is more than the price charged, which means the demand will outstrip the supply.

> , then people who didn't manage to get one would be out of luck No There are two reasons why people can't get a ticket: - Fans bought all the tickets, limited places so the only way you could get them is if someone gives up. Nothing wrong in reselling a ticket for the price you paid for them or less - Scalpers bought all the tickets. This is the main reason why today you can't get a ticket. Because they get on the…

A couple points:

1. It's unlikely that the price is set at $X, and there are precisely enough tickets to satisfy everyone who wants one at $X, but no more. Either the tickets won't sell out at $X, or there will be those who can't get tickets at $X.

2. If the original sellers knew how much demand there was, either they'd set the price to be as close to the balance point as possible, or not. If they did, then there should be no opportunity for scalpers unless the price is very unsticky upwards; but if there are a lot of people willing to pay well above the original price, then it's again unlikely that demand is equal to supply.

3. If the original sellers didn't try to set the market value, then there would have been a shortage anyway. Again, the fact that scalpers can extract a large amount from each resold ticket means there's enough demand at high prices, and therefore likely to be too much demand at low prices.

Re: High-Speed Ad Traders Profit by Arbitraging Your Eyeballs

#29

Post by ikeboy »

bobbyi_settv wrote: post #26
braythwayt wrote: post #12

Earlier quoted context omitted.

“Scalpers make Benefit X possible” says nothing about whether “Scalpers create Harm Y.” For example, you say "If reselling tickets was impossible and the price remained the same, then people who didn't manage to get one would be out of luck; now, they can pay more and still get one.” But if there is a fixed supply of tickets, then there are a fixed number of people getting tickets. All you are changing is which peopl…

> All you are changing is which people get the tickets. I don't think this is true. Without scalpers, a sold-out concert ends up with basically every seat filled. Since services like StubHub have gotten big, it is now more common for there to be many empty seats because those were snatched up by scalpers and never got bought. The scalpers are often acting rationally here by holding out for high prices until the end i…

I don't think this undermines my point about value of tickets. If the total spent on some group of tickets goes up, then the buyers valued those tickets more than otherwise; it's thus better for them to have those tickets than the previous group.

Re: High-Speed Ad Traders Profit by Arbitraging Your Eyeballs

#30

Post by [deleted] »

raimundjoss wrote: post #10

I think the analogy here with Wall St is apples and oranges. In Wall st, the security traded is fungible. Here in the ad world, an ad view could be high quality or lower quality. It could be a bot or a human looking to buy something. I am an engineer who spent 12 years in the ad tech industry. This problem is especially acute in the online video ad side where dollars are exchanged based on views and CPMs, not someone…

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