07/01/2009
Will your Michael Jackson tickets be worth more than the refund?
Guest post by Dr Christopher Paley
In offering Michael Jackson ticket holders the choice to take a refund or receive their unusable tickets as souvenirs, AEG have introduced music fans to one of the most intractable problems in the mathematical sciences. If nearly everybody takes the refund then the tickets, designed by the King of Pop himself, will become collectors’ items and worth a fortune. However, if all 750,000 fans take their tickets then they will all hold worthless bits of fancy paper.
The choice facing fans is analogous to the El Farol bar problem, which has been the subject of hundreds of academic papers and inspired a whole field: minority game theory. In this problem, there’s a funky but small bar which is great fun on a Thursday night if less than sixty people turn up, but sticky and unpleasant if more than sixty people attend.
There are a hundred people in the town who like the kind of music played in the bar (which is Irish folk rather than Billie Jean). On a Thursday night, do you go to the bar or not?
If you reason that most people will stay away then you should go, but everyone else should reason in the same way and therefore it will be crowded. Once you’ve realised this you should stay at home and listen to a CD, but if everyone thinks like you then the bar will be empty and you’ll have missed out. In the same way, if you reason that every Michael Jackson fan will take a refund then you should take the ticket, but they will reason in the same way and there will be a glut of souvenirs, so you should ask for your money back, but then…
So, with the benefit of the hundreds of academic papers from scientists around the world, what should a Times reader who holds a ticket do? The research tells us that, if you assume everybody else will use the same strategy as you, then the best you can do is to toss a dice: deciding whether or not to keep the ticket according to a probability determined by demand for tickets and price. However, working out the probability is tough and most fans, without the benefit of minority game theory, won’t be tossing die.
There is one huge factor in the Michael Jackson problem which isn’t in the standard El Farol bar problem. Hype. If the owners of the El Farol bar distributed fliers announcing it was going to be quiet next week, then it would be a safe bet to stay at home with a glass of wine. So my advice would be to read the newspapers and decide what to do on the basis of the pundits’ advice. If all the articles you read say the tickets will be collectors’ items then ask for a refund, and if they all accuse AEG of ripping off distraught fans then take the ticket. It was, after all, designed by Michael Jackson.
Will your Michael Jackson tickets be worth more than the refund?
Guest post by Dr Christopher Paley
In offering Michael Jackson ticket holders the choice to take a refund or receive their unusable tickets as souvenirs, AEG have introduced music fans to one of the most intractable problems in the mathematical sciences. If nearly everybody takes the refund then the tickets, designed by the King of Pop himself, will become collectors’ items and worth a fortune. However, if all 750,000 fans take their tickets then they will all hold worthless bits of fancy paper.
The choice facing fans is analogous to the El Farol bar problem, which has been the subject of hundreds of academic papers and inspired a whole field: minority game theory. In this problem, there’s a funky but small bar which is great fun on a Thursday night if less than sixty people turn up, but sticky and unpleasant if more than sixty people attend.
There are a hundred people in the town who like the kind of music played in the bar (which is Irish folk rather than Billie Jean). On a Thursday night, do you go to the bar or not?
If you reason that most people will stay away then you should go, but everyone else should reason in the same way and therefore it will be crowded. Once you’ve realised this you should stay at home and listen to a CD, but if everyone thinks like you then the bar will be empty and you’ll have missed out. In the same way, if you reason that every Michael Jackson fan will take a refund then you should take the ticket, but they will reason in the same way and there will be a glut of souvenirs, so you should ask for your money back, but then…
So, with the benefit of the hundreds of academic papers from scientists around the world, what should a Times reader who holds a ticket do? The research tells us that, if you assume everybody else will use the same strategy as you, then the best you can do is to toss a dice: deciding whether or not to keep the ticket according to a probability determined by demand for tickets and price. However, working out the probability is tough and most fans, without the benefit of minority game theory, won’t be tossing die.
There is one huge factor in the Michael Jackson problem which isn’t in the standard El Farol bar problem. Hype. If the owners of the El Farol bar distributed fliers announcing it was going to be quiet next week, then it would be a safe bet to stay at home with a glass of wine. So my advice would be to read the newspapers and decide what to do on the basis of the pundits’ advice. If all the articles you read say the tickets will be collectors’ items then ask for a refund, and if they all accuse AEG of ripping off distraught fans then take the ticket. It was, after all, designed by Michael Jackson.
