I had a perfect seat at the World Cup. Then someone a few rows ahead of me stood up. Then the next row. Then the next. By the time it reached me, I had no choice but to stand, too. Here's the economics of why that happens everywhere.
I love the discussion of negative externalities, but it seems like that's not important to most Americans these days (see air pollution, traffic, smoking, non-vaccination, etc.).
Instead, how does standing at sporting events look through the lens of supply/demand? As long as we keep filing up the stadiums, owners aren't incentivized to penalize standing. The best seat is in my living room with a big-screen TV, cheap snacks, and a pause button on the DVR so I can go to the bathroom without missing a play. The owners would rather me buy a ticket, and a $20 beer, but they're filling up the stadium (high demand) so no need to adjust policies!
You're right that there are bigger externalities out there. Pollution, traffic, and carbon emissions are the ones I spend the most time on in class, actually.
There are really two flavors of negative externalities. The first is what you're describing: a company or industry imposing costs on a large number of people who have no recourse (e.g., a factory polluting a river that runs through an entire town). The second is more interpersonal, where a person or a small group imposes a cost on another person or small group (e.g., the standing fan and the blocked view behind them).
That distinction matters because the solutions are completely different. When the externality is interpersonal, you can often negotiate your way out of it. In theory, I could have offered the people in front of me something to sit down. That works reasonably well when the affected parties are few and identifiable.
It breaks down completely when the externality scales up. A single individual can't really negotiate with a factory on behalf of an entire watershed. That's where regulation, taxes, and policy have to step in. That’s why I save the big externalities for the end of my lesson. I want students to understand the concept with something they've lived through before we get to the problems that require more than individuals to solve.
All that’s to say, yes, I agree. Bigger externalities exist, and they matter more.
I absolutely LOATHE standing at concerts, especially metal shows. I purchase a SEAT so I can SIT in it. Ergo, I always buy front row in my section. Let everyone behind me stand while I just chill with my cheap ATL hot dogs and let the concert wash over me. Always a great view.
But ushers don't have to ask people to pay'. This is 2026 -- the stadium owners know who paid for every seat. There is AI to do facial recognition of every person standing in the stadium to check that they are the person who paid for the ticket, and they have IDs for everyone who entered, to discover those who came in and changed seats. The owner hands a little sheet to everyone who enters, stating that there will be a small charge for standing. They offer, say, five minutes overall exemption for "excitement" when there is a score. Those who stand for more than five minutes get a minor charge after the game. Economics doesn't rule -- incentives do.
Also one of the better metaphors for inflation.
I honestly never thought of before, but I love it.
I have to give credit to Ivan Werning for this (and his explanation of the "Inflation as a Conflict" paper).
I love the discussion of negative externalities, but it seems like that's not important to most Americans these days (see air pollution, traffic, smoking, non-vaccination, etc.).
Instead, how does standing at sporting events look through the lens of supply/demand? As long as we keep filing up the stadiums, owners aren't incentivized to penalize standing. The best seat is in my living room with a big-screen TV, cheap snacks, and a pause button on the DVR so I can go to the bathroom without missing a play. The owners would rather me buy a ticket, and a $20 beer, but they're filling up the stadium (high demand) so no need to adjust policies!
You're right that there are bigger externalities out there. Pollution, traffic, and carbon emissions are the ones I spend the most time on in class, actually.
There are really two flavors of negative externalities. The first is what you're describing: a company or industry imposing costs on a large number of people who have no recourse (e.g., a factory polluting a river that runs through an entire town). The second is more interpersonal, where a person or a small group imposes a cost on another person or small group (e.g., the standing fan and the blocked view behind them).
That distinction matters because the solutions are completely different. When the externality is interpersonal, you can often negotiate your way out of it. In theory, I could have offered the people in front of me something to sit down. That works reasonably well when the affected parties are few and identifiable.
It breaks down completely when the externality scales up. A single individual can't really negotiate with a factory on behalf of an entire watershed. That's where regulation, taxes, and policy have to step in. That’s why I save the big externalities for the end of my lesson. I want students to understand the concept with something they've lived through before we get to the problems that require more than individuals to solve.
All that’s to say, yes, I agree. Bigger externalities exist, and they matter more.
Interesting. In Seattle, they had a single chubby guy circulating and reminding people to sit back down and that was all it took! God bless him.
I absolutely LOATHE standing at concerts, especially metal shows. I purchase a SEAT so I can SIT in it. Ergo, I always buy front row in my section. Let everyone behind me stand while I just chill with my cheap ATL hot dogs and let the concert wash over me. Always a great view.
But ushers don't have to ask people to pay'. This is 2026 -- the stadium owners know who paid for every seat. There is AI to do facial recognition of every person standing in the stadium to check that they are the person who paid for the ticket, and they have IDs for everyone who entered, to discover those who came in and changed seats. The owner hands a little sheet to everyone who enters, stating that there will be a small charge for standing. They offer, say, five minutes overall exemption for "excitement" when there is a score. Those who stand for more than five minutes get a minor charge after the game. Economics doesn't rule -- incentives do.
There's something funny about the idea of getting a receipt in the mail after a game with timestamped pictures of you standing.