Would you pay $5,000 for a Bruce Springsteen concert ticket? The algorithm thinks you might.

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Bruce Springsteen fans were appalled last month, when Ticketmaster sold some seats for his upcoming concert tour for as much as $5,000. The average price was actually around $262, according to Ticketmaster. But for a certain subset of tickets, when demand spiked, so did the prices. Ticketmaster uses “dynamic pricing algorithms,” which calculate the price of a seat based on real-time demand. Among other things, it’s an attempt to edge out ticket scalpers. There’s been backlash against this before. Ride-hailing apps like Uber use this kind of algorithm too; it’s called surge pricing. And it has kicked in during emergencies like a terrorist attack and a mass shooting — prices went through the roof as people were trying to flee. “Marketplace Tech’s” Marielle Segarra spoke with Vivek Farias, a professor at the Massachusetts Institute of Technology’s Sloan School of Management, about the concept behind dynamic pricing and how to potentially avoid letting an algorithm create situations like this.

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