Winnipeg's ticket gouging ban makes matters worse

In Manitoba, it's against the law (specifically, section 60 of the Amusements Act) to sell tickets for more than what you paid for them, punishable with a fine up to $5,000. There are good intentions behind the law — it's a nice ideal to have a society where no one gouges you on ticket re-sales. But in reality, this law exacerbates the precise problem it is supposed to solve.

A great case study is the Atlanta-Thrashers-turned-Winnipeg-Jets' first-ever regular season NHL game. While the face value of Winnipeg Jets tickets range from $49 to $200, tickets were selling for more than $3,000 on the resale market.

Ticket resellers are clearly flouting the Amusements Act. And despite the act's name, police appear to be anything but amused, with busts being made against scalpers. So it's not one of these strange, antiquated laws — it's a law that's being enforced.

A lose-lose proposition

It is normal for a collective agreement to have win-lose propositions. Some clauses clearly favour management at the expense of employees, and some perks for workers clearly hurt a company's bottom line.

But collective agreements should not have lose-lose propositions. If management and workers can both do better by eliminating a provision in a collective bargaining agreement, there's no logical reason for the clause to be there in the first place.

Can a pay cut be pareto improving?

Although I greatly enjoy the competitive balance that the NHL salary cap has created in hockey, it seems to me there is one glaring inefficiency. By limiting the amount of money teams can spend, mediocre players with high salaries who would have a job in the NHL based on merit are instead sent to the minor leagues because given the cap, their salary allocation can best be spent elsewhere.

Several overpaid players have been shipped to the American Hockey League this season so their massive salaries don't count against the salary cap: Wade Redden ($6.5 million), Sheldon Souray ($5.4 million), Michael Nylander ($5.0 million) and Jeff Finger ($3.5 million). The NHL club still has to pay their salary, but it doesn't count against the salary cap.

Parking at Scotiabank Place

On Tuesday, I attended Jason Mraz's concert at Scotiabank Place. It was awesome.

What was less awesome was the $9 I paid for a package of M&Ms and a bottled water and the $17 I paid for parking. I anticipate gouging on food and drink at hockey rinks since they have a monopoly and prohibit the bringing in of outside food, but I was surprised to find that the parking lot near the arena charged $17, considering that it was only about five per cent full (the concert was not very well attended).

NHL draft rules create perverse incentives

It's one of the most basic principles of economics: people respond to incentives. And when it comes to incentives, the National Hockey League creates some pretty perverse ones.

If we want teams to try to win, we should reward winning and punish losing. But the NHL offers a hefty reward for losing. The worse teams do, the more likely they are to get a high draft pick the following summer. A top draft pick can land you a franchise player that can bring success to your team for years to come — a Sidney Crosby or an Alex Ovechkin. It gives teams who don't think they can compete for the Stanley Cup an incentive to tank at the end of the year. Sure, there's a lottery that creates some uncertainty around what team gets which draft pick, but it depends on a rigid formula that ensures teams that lose are still rewarded with high picks.

Irrationality and hockey tickets

Vancouver newspaper The Province reported over the weekend that despite astronomically high market prices for tickets to the Olympic men's hockey final, many people were planning to hang on to their tickets.

This is somewhat mind-boggling. Olympic tickets were originally sold in a lottery, which means that the people who originally bought the tickets from the lottery paid far less than the market value the morning of the big game (in the neighbourhood of $3,000 per ticket). Personally, if I had a pair of tickets that someone was willing to pay $6,000 for, I'd sell. I love hockey (and it was a great game). But I could do a lot more with $6,000 than with a pair of Olympic final tickets.

Hockey visors and moral hazard

In its Feb. 1 issue, The Hockey News makes the case for mandatory visors in the NHL. Currently, visors are optional, but the magazine argues that making them mandatory would cut down on eye injuries.

"The players would benefit from improved safety in the workplace. Mandatory visors wouldn't guarantee the elimination of catastrophic eye injuries, but the evidence suggests it'd be pretty darn close," writes Editor-in-Chief Jason Kay.

Writer John Grigg brings up the very scary eye injury suffered by then-Leafs defenseman Bryan Berard in 2000. In analyzing the current trend of more players wearing visors, Grigg argues: "[I]f current trends continue, the NHL will have fewer and fewer reminders of [Berard's injury]."

What I've been up to

I've been very busy with school in recent weeks, but have been doing a little writing on the side. Here's some stuff I've done lately:

- My take on the single transferrable vote proposal put forward in British Columbia was published in the Canadian Student Review's Winter 2009 edition.

- I've been covering the Hamilton Bulldogs, including a profile of their coach Guy Boucher (also in French), and the team's recent home games against the Toronto Marlies and Abbotsford Heat.

Correlation vs. causation and hockey

Here's a good example of mixing up correlation and causation, for those sports fans who happen to be econ geeks. Our profs in empirical courses always harp on this kind of stuff.

I have the third overall pick from this year's NHL draft, Matt Duchene, in my hockey pool. So I was looking for analysis about how he might perform this season when I came across a posting on Mile High Hockey tackling the question of whether Duchene could benefit from another year of junior hockey before turning pro. The blogger does this by analyzing how other high draft picks faired in their rookie year, making this conclusion:

"Granted, this is an extremely small sample size, but the argument can be made here that the statistical output of the rookie season for these high draftees wasn't enhanced by an extra season in juniors. The 4 who made the leap averaged .53 points a game. The 6 who didn't? .43 PPG."

But there's an important oversight. Sure, there seems to be a negative correlation between playing an extra year of junior and output during one's rookie NHL season. But it's quite likely that the reason these players were sent back to junior for another year was because they were less skilled to start with. There's nothing to indicate that the extra year of junior made these players worse than they would have been had they jumped straight to the NHL.