By ADAM DAVIDSON JUNE 4, A few weeks ago, I met Barry Arakelian a minute after he got scammed at a Tom Petty concert. The tickets, however, turned out to be fakes, and Arakelian, who was getting the evil eye from his girlfriend, approached a nearby police officer for help.

By that point the scalper was long gone; Arakelian was embarrassed. It seemed like a lot, but Arakelian accepted almost immediately. And as I watched him enter the Beacon — these tickets worked — I was struck by the economic oddness of the whole experience. He may still be able to sell out Madison Square Garden, but he often prefers smaller venues like the Beacon, where there is a large demand for a shorter supply of tickets.

Petty also insists on keeping tickets below market price. And while I can see why a veteran artist would try to accommodate his fans, I also wondered why Petty and his promoter would price tickets so low when there were clearly people willing to pay much, much more. Few products are so underpriced that an entire subsidiary industry exists to take advantage of the discrepancy.

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Yet concerts and sporting events consistently price their tickets low enough that street scalpers risk jail time to hawk marked-up tickets, and StubHub makes hundreds of millions a year in revenue.

After barely keeping up with inflation for decades, concert prices have risen wildly since , or around the time when baby boomers, who helped start the industry, aged into a lot more disposable income.

It was also around this time that Internet piracy made the music industry more reliant on concert revenues.

These days, prices can seem incredibly high. Yet to an economist, the very existence of scalpers and companies like StubHub proves that tickets are far too cheap to balance supply and demand. Pascal Courty, an economist at the University of Victoria, in Canada, who has spent the better part of 20 years studying the secondary-ticket market, has identified two distinct pricing styles.

Some artists, like Streisand and Michael Bolton, seem to charge as much as the market will bear — better seats generally cost a lot more; shows in larger cities, with higher demand, are far more expensive, too.

If you want to catch Bolton on the cheap, head to Western New York. The second group comprises notable acts, like Bruce Springsteen and Pearl Jam, that usually keep prices far below market value and offer only a few price points. Concert promoters can overcharge on everything from beer sales to T-shirts, and the benefits of low-priced tickets can accrue significantly over the years as loyal fans return.

In part, this explains why artists like Springsteen and Petty are content to undercharge at the gate while others, perhaps wary of their own staying power, are eager to capitalize while they can.

But by leaving money on the table, Springsteen and his ilk might be doing their fans an inadvertent disservice. Jared Smith, the president of Ticketmaster North America, told me that the artists who charge the least tend to see the most scalping.

Springsteen and others have angrily denounced scalping at their shows, but their prices are guaranteeing the very existence of that secondary market, which has become ever more sophisticated over the years.

Many scalpers now use computer programs to monopolize ticket buying when seats go on sale, which forces many fans to buy from resellers. One of the surest ways to eliminate scalping, Smith told me, is to charge a more accurate price in the first place. Live Nation, Ticketmaster's parent company, is launching new technology to thwart the scalpers who use bots to sweep up the best concert seats and resell them at high prices.

As an industry leader, with access to nearly limitless data, Ticketmaster can determine fairly precisely just how much fans are willing to pay for every kind of show. Generally speaking, Smith says, artists who charged a lot more for the best 1, or so seats would reduce the incentive for scalpers to buy these tickets; it would also allow artists to charge even less for the rest of the seats in the house.

I want to prove there is a better way to do this. Smith, meanwhile, spends much of his time these days trying to persuade artists that increasing the price of their top tickets to near the point where supply meets demand is not greedy but equitable for their fans.

The impact is already being felt on the street. His business has suffered tremendously since , when New York State legalized ticket reselling and helped supply meet demand.

After fighting the secondary market for years, some have surrendered. The Mets, like 27 other baseball teams, have signed a deal with StubHub, and the Yankees recently signed one with Ticketmaster, to create a formal secondary market. The organizations might as well get a piece of the action.

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He would have paid even more, he said, if he knew the money was going to an artist he admired. It is 28 total, not the Mets and 28 other teams. A version of this article appears in print on June 9, , on Page MM16 of the Sunday Magazine with the headline: How Much Would You Pay to See Michael Bolton?.

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Side Hustle: How to Make Money by Selling Tickets Online

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