International Law

Jay Leno Heartless?

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Greg Maniw, writing at his Economics blog, wonders if Jay Leno is heartless.

As reported by the Detroit Free Press, the story is "Tonight Show" host Jay Leno has something to say about how people are trying to sell tickets to his free shows in Michigan over the Internet.

On Monday night's NBC program, Leno said, "Here is something that annoys me.

I look on eBay today and I see four tickets to my show for sale. ... You're out of your mind to pay $800 to see me. ... I would like to ask the people on eBay to take the tickets down. There is nothing for sale here."

But for Mankiw, this is all an act by Leno because as he argues:

"Absent externalities, markets improve the allocation of resources. Both the buyer and the seller of the ticket must be better off: otherwise they would not engage in the transaction.

The only significant negative externality that I can see here is on Mr Leno himself.

In other words, Leno's objection to the ebay sale is an understandable and fundamentally self-interested act in that the sale impedes his abilty to appear selfless."

Hmm, it is probably more likely that a number of people in Detroit don't know that the tickets, even in the California show, are free.

Leno is trying to persuade those people in Detroit not to be naive and part with $800 for something that is essentially free.

Mankiw does not take the possibility into account that the purchasers are being duped, and Leno is trying to prevent it.

Markets for misplaced preferences are not markets whose outcomes we need to promote.

Full post as published by Misleading Advertising Law on March 17, 2009 (boomark / email).