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The public reaction has been mixed. Some have praised Swift’s entrepreneurship. But others think her approach is exploitative of fans and downright mean.

Let’s set the PR aside and think through the economics: Effectively, Swift is selling her tickets in an auction. Even though the tickets themselves will be sold at fixed prices, they’ll go to the people who are willing to “pay” the most through buying merchandise, generating social media buzz, and watching Swift’s music videos over and over again. Potential buyers are competing with one another, just like in a traditional auction.

Concert ticket auctions have been tried on Ticketmaster before. They worked out well for artists, and badly for scalpers.

My economist colleagues Aditya Bhave and Eric Budish studied a series of auctions that Ticketmaster ran in 2007. In each case, some tickets were sold by auction, and others were sold at fixed prices, so Bhave and Budish could compare artist revenue across the two pricing strategies. By checking resale prices on eBay, they could measure the scalper rates, as well.

Bhave and Budish found that using auctions roughly doubled artists’ revenues. Meanwhile, the auctions substantially cut the profits associated to reselling tickets — even though some ticket brokers did bid in the auctions, their average profits were an order of magnitude lower than the return to scalping tickets they bought at a fixed face value.