The Gouged Price Nathan Mankiw Summary

This article by Nathan J. Robinson starts with the tale of Gregory Mankiw paying way too much money for tickets to the Hamilton Broadway show and his musings in the New York Times. The bottom line of Mankiw's argument is pretty straightforward economics. There is limited supply of a hot commodity, so allowing a market to determine the equilibrium price of a product with high demand and low supply leads to mutually beneficial outcomes, in which people who value the product a lot can spend a lot of money on it and both sides end up better off because of the trade. Mankiw addresses some of the shortcomings of the current Broadway ticket pricing system. The gouged price does not benefit the actors and directors, too few people get to see the show