Here, resources are not allocated efficiently because many people wait in line to increase their odds of winning, but never actually make it into the show. Tickets could be distributed more efficiently by auction or sale, since they would go to those who value them the most; also, people would not divert their resources at a chance to win seats, only to come out empty-handed. So, why would Saturday Night Live distribute tickets like this instead of just allowing the purchase of tickets? One could argue that making show-goers seek tickets by waiting outside the studio is valuable advertising that increases the "hype" surrounding the show. After all, it quite literally demonstrates to onlookers how many people are willing to wait overnight just for a chance to see the show in person.
Wednesday, October 13, 2021
Saturday Night Live and Rent-Seeking
When I was in high school, one of my bucket-list items was to see an episode of Saturday Night Live in person. I recently remembered this old dream of mine and looked into how one goes about getting tickets to SNL, and came to a realization: this is a prime example of rent-seeking. One cannot simply purchase a ticket to see the comedy show – your best bet is to win a ticket from the standby line that starts to form on Fridays. In this example, the rent that people seek are the free tickets to the live show or dress rehearsal, and they divert their resources to increase their chances of winning by camping out in the standby line. If someone wants to increase their odds of winning a ticket, they must get to the line earlier and wait for a longer period of time (which diverts even more time/resources).
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I think this is an interesting case of rent-seeking and can probably be applied to many other entertainment areas. One that comes to mind for me is game shows, although the "rent-seekers" would no longer be the viewers, but rather the participants themselves. Every person who hopes to get a spot on the show must go through the lengthy process of filling out applications, questionnaires, information sheets, and maybe even interviews, but very few of these people actually get selected for the shows. The Bachelorette, for one, has millions of viewers every week (so most likely thousands of applicants), but only around thirty contestants are chosen for each season. Every other applicant diverted their time and resources to the cause of getting chosen for the show, but only these few actually get the thing they are seeking. This would fall under a similar reasoning behind inefficient allocation of resources. Building on that, I would venture to say that all job applications fall under such criteria.
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