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The NFL's championship game, called the Super Bowl, is played at a neutral site
The NFL's championship game, called the Super Bowl, is played at a neutral site. Home-team fans must put their names into a lottery for a chance to buy tickets to the game. Winners then purchase tickets at the stated price.
Explain why this allocation mechanism does not maximize total fan welfare.
If lottery winners are allowed to sell their tickets in a secondary market, will total welfare be maximized?
Expert Solution
The lottery system does not maximize fan welfare because not all fans have the opportunity to buy tickets and see the game. When these tickets are resold, total welfare increases because a larger population then has access to purchase them. However, the increased price from the middlemen who purchased the tickets from the lottery contributes to less general welfare since it would likely have been cheaper for fans to bid and buy tickets directly from the NFL.
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