There's something frustrating about reading this. Perhaps its that a technological advancement that was supposed to make life easier is being capitalized on by a small group of technically competent people, shutting out the average user.
I was thinking of going to PAX next year a few hours ago and decided to do a bit of research. For this year, the 4 day tickets apparently sold out in 23 minutes, and the rest within 5 hours. I'm having a hard time imagining how its going to be possible for anyone to get some this coming year without a bot.
Ultimately this is not about technology, it's about economics. Surely the restaurant should raise their prices until not enough people want to book 2 months in advance to make bots and make this an issue. Or PAX should raise their prices so they don't sell out in 23 minutes but still sell all their tickets before the show. Or either business should increase their capacity. Or perhaps they are capitalising on the fact that they are oversubscribed as some kind of marketing device. Either way, any time there is a limited supply of something people are going to figure out ways to get some, and if the limited supply is available on the web, people who understand the web will have an advantage.
For example: PAX is trying to build a community event. The target demographic is not "wealthy people who love games", it's "people who love games" Changing the price results in a different convention.
Similarly, a popular $20 restaurant can't double their prices to keep demand manageable, because a great $20 dinner that costs $40 will reduce the perceived quality of the restaurant.
In effect, part of the "effective price" will be the monetary cost, and the other part of the price will be wasted time/emotions/connections/whatever that discrimiminates those who get the ticket from those who don't. This is basic, well researched economics, with plenty of real life examples in various countries, regimes and industries.
The common options include:
a) $x + significant time spent waiting in line - some wait in line and get nothing; some value their time a lot and don't attempt buying.
b) $x goes to the original supplier, $y goes to scalpers/touts/your employee bribes - the stuff gets sold at money market price, but someone else gets the difference;
c) lottery - either intentional lottery, where everybody has a chance of getting a ticket for $x despite that it's market worth is >$x; or an unintentional lottery, where random factors (showing up at the right time, getting a reservation that someone else cancelled) determine if you can or cannot get the ticket. In both cases, the "buyer" might be motivated to resell it if possible, since it's possible that he paid $20, he wouldn't go if it cost $100, but someone else wants to pay $100, so ...
d) (ab)use of advantages - political connections, bots, whatever; you buy at $x and sell at the market price.
In any case, (most) buyers don't get the intended effect of cheaper price; but the seller loses out. Only the middlemen benefit, without adding value. (In one sense, they add back the value that the seller reduced by mispricing)
I've seen what happens in USSR when the majority of economy functions this way - trust me, in most cases raising the price is actually the appropriate response; because otherwise there is so effing large amounts of effort&resources that is wasted - the seller gets $x, but the buyer anyway spends "market price" of $3x to compete with other buyers by giving $x of cash and $2x of wasted, unproductive effort.
In the example of (a), there is no middleman, and the set of buyers becomes biased toward those who are dedicated over those with more money, because they intentionally distributed the effective price over multiple...payment channels (? I'm not much of an economist). Edit: actually there is a middleman; I recall the Wii launch, where I knew a guy who waited in line just to sell them on eBay. But still, there are "true fans" waiting who might be priced out at market value.
In the lottery style where tickets go on sale at x time and it's a free-for-all, some significant percentage of this round of sales will go to people that "deserve" them and get to enjoy a reasonable price with negligible non-monetary cost. Yes there will be some money lost to scalpers, but this can be reduced by forcing resellers into an official exchange channel where the original seller gets a cut.
Burning Man is an event where demand has exploded over the past few years and the supply cannot keep up. The organizers are also very concerned about getting the right people the tickets without jacking up the price. They have evolved a somewhat complex multi-pronged approach with lotteries, high-price presales, and a homegrown exchange system (STEP), where I believe they mandate reselling at face value.
edit: On second thought, I have neglected the cost of the people who expend time/effort and miss out completely. But, I still think there are benefits to pricing below market value with a sufficiently robust strategy.
A number of top restaurants (otherwise booked, on a Saturday night, for 2 weeks) auction off a single table, where 50% of the proceeds go to the restaurant, and the rest to a foundation for gastronomical research.
Another approach is to require a credit card and charge almost the price of a full dinner if you don't show up. The 41 in Barcelona goes one step further and makes you pre-purchase the entire meal.
Some guests will spend another $300 on an expensive bottle of wine. I think it's fine to let some people pay extra in advance to be guaranteed to get a table.
PS: your answer isn't allowed to be captcha.
A better solution would be to charge for making a reservation, and give that charge back as a credit against the meal. You don't have to raise prices, you increase the probability that someone making a reservation intends to show up, and when you have a no-show, you get compensated for the empty table (and can still give it to a walk-in.)
Restaurants like State Bird are a bit of a poor example, anyway. Regardless of their reservation book they're going to fill all their tables every night anyway right now, and they don't particularly want larger (5+) parties anyway because they're tiny. I think they want prices low enough that they can establish a loyal clientele that will keep them going once they're no longer the "hot spot" in SF. Or maybe (gasp) they like offering their food to a broader range of customers. Chefs tend to be a little more down-to-earth.
Feel like if they market this move a little better, they could convince their loyal customers that this will allow them a better chance at getting reservations.
Kid Rock Takes On The Scalpers
1) More shows.
2) Beat the scalpers at their own game.
3) Go paperless.
4) Don't sell the first two rows.
This is sort of like estimating the weight of a cow by assuming it's perfect sphere with a radius.
But this isn't entirely surprising. It's a common sentiment on Hacker News, where highly complex markets are reduced to incredibly simple single-variable, Econ-101-stye supply/demand curves. The poster usually then goes on to believe they've solved some major problem and wonders how everyone else can be so blind as to see such a simple solution.
But far be it to leave at just snarkiness. There are a whole slew of reasons why pricing as a lever cannot be used to fine-tune demand. Simply off the top of my head:
- Desirability of restaurants is heavily determined by their pricing context. That hole in the wall Thai place with the IKEA chairs is a great place to get $5 Pad Thai, and is always crowded. If they charged $15 the expectations for service, food, decor, location, etc, would be entirely different. Cannot simply pull the price lever.
- Desirability of restaurants is heavily determined by perceived authenticity. That Chinese restaurant where all the Chinese immigrants eat is popular with everyone because it communicates authenticity. It loses that authenticity if it prices itself out of reach of the people who lend it authenticity. Funnily enough, authenticity is frequently derived from the working-class everyman. Cannot simply pull the price lever.
- Restaurants are divided into price ranges, with not a lot of intermediate prices. This limits the "resolution" to which you can tune your pricing before you jump into the next range (which comes with expectations, authenticity, and other issues as above). There are demand cliffs moving from one range to the next - in other words restaurant pricing is not a continuous function and cannot be modeled as such. It's not even a "sorta kinda linear" curve.
- As price increases demand does not drop off linearly, or close to linearly. If you've got a line out the door for $5 burritos, a $6 burrito may cause only a small dropoff in customers, while a $7 burrito may cause your business to largely dry up. The holy grail of "that price where everyone who wants a burrito can get one without waiting very long" may not be achievable by simply pulling the price lever.
Pricing food is complex. Until the day where all food becomes standardized, commoditized, and we can treat our restaurants like we treat our nuts-and-bolts supplier, it will remain like this.
That's a strange phenomenon I've also noticed, since posters here usually have the opposite instinct in any other field. Most systems end up complex and difficult to model by simple rules, unless you restrict your model to a specific range of parameters or behavioral regime. Do you want to know how increasing or decreasing pressure affects fluid flow? Most knowledgeable people would immediately say that it depends: does the pressure change impact the flow regime? If it stays within a flow regime, there is one answer. But if it changes from laminar to turbulent flow or vice-versa, the answer may differ. What initially seemed like a simple relationship has a confounding factor of macro-scale regime-switching.
But in economics, HNers feel somehow confident just giving a blanket answer without analyzing the situation. Price and demand of restaurants are linearly related; raising minimum wages increases unemployment; etc. Blanket statements they'd never make in an unqualified form in fields they actually know about, somehow become fine in a field they haven't studied. Nobody seems to feel the need to inquire, well, is it a simple relationship, or can changes in a parameter change the operating regime? Very strange.
And after this, the minute someone opens a restaurant where food is not standardized, commoditized and that can't be treated like a nuts-and-bolts supplier... a market is (re)born.
I have to disagree with your point 2: The blue-collar working man doesn't want to queue with a bunch of students for half an hour for his food, however authentic it may be.
But there is a major difference - if you spend three hours in a queue, you lost those hours and noone gained from that. If you spend three hours writing a sniping bot, noone really needs it. But instead if you spend those extra three hours even sweeping streets at minimum wage, and pay that extra money for more expensive tickets - then the seller has gained extra money, which (on scale) increases supply and the world has gained some useful work.
The issue here is bots, so the solution should be to make such reservation / booking sites unfriendly to bots. Then the event organisers / restaurants can choose to adjust their prices based on the actual demand and their long term vision instead of trying to play some silly price war with ticket touts.
You can draw randomly, you can determine who you want to come and invite them, or you can determine who want it the most by asking them to pony up a lot of resources - money or waitingtime (live queues) or effort. It's your choice, unless you refuse to decide, and let scalpers/botwriters decide for you and take everyones money for that.
Maybe we should start trial runs of this feature..
o Send me an email if the price drops below $_____
o Send me an email and put 1 item in my shopping cart for me if the price drops below $_____
Based on the bot's code , it looks like all they ask for is a phone number and an email address. It might be a good idea to at least require a captcha, if not a credit card deposit of a few bucks.