Game Theory of the Burning Man Lottery
February 1, 2012 11 Comments
Burning Man is difficult to describe. Having never been to this event, I gather it’s a temporary city in the desert, full of art and often lacking in clothing. Despite the somewhat disconcerting description, Burning Man is very popular. To deal with this demand, Burning Man came up with a fairly convoluted lottery system.
The lottery system chosen by Burning Man is, like everything else related to this community, unconventional. Let’s talk through some options Burning Man Organization could have used to deal with the increased demand for these tickets.
Players
- Burning Man Organization (BMORG) – the organizers of the event. If this were a traditional event, their goal would be to make money. However, BMORG also values fairness and equality, as well as access to the event. They just need enough money to host the event.
- Burners – the attendees of the event. Their motivation is fairly simple: they want to attend the event.
Constraints
- Really just one: number of Burners who can attend. From what I can gather, this is approximately 53,000.
Possible Solutions -or- How can tickets be fairly distributed?
First Come, First Serve. The easiest way to distribute tickets: BMORG sells tickets until there are none remaining. This is the strategy they used until this year. It was discarded because tickets were selling out too quickly. Remember when I mentioned BMORG values fairness, equality, and access to the event? A first-come-first-serve model didn’t support that.
Highest Bidder. Tickets are auctioned off to whomever wants to pay top dollar for them. This would capture the maximum amount of profit, while allowing Burners to indicate their willingness to pay for tickets. However, the Burning Man community tends to shy away from extreme-capitalist strategies. This distribution option wouldn’t allow everyone equal access to the event.
Pure Lottery. A completely random, completely fair option. While this doesn’t allow for any sort of price discrimination on the part of the Burners, I’m honestly not sure why this method wasn’t chosen.
Hybrid Model -or - the solution they chose. The “Lottery” BMORG ended up with is a hybrid model of the three above options. You can read about it in detail here. A quick summary:
- Round 1: Pure lottery, $420 per ticket. 3,000 tickets sold. Limit 4 tickets per entry.
- Round 2: Pure lottery. Tickets sold in three tiers: $$390, $320, and $240. If you entered the lottery at a higher level, you were also entered into the lottery for the lower pricing levels. This captures willingness to pay of Burners. 40,000 tickets sold. Limit 2 tickets per entry.
- Round 3: First-come-first-serve model, $390 per ticket. 10,000 tickets to be sold. Limit 4 tickets per entry.
Several Burners, knowing they weren’t guaranteed tickets this year, entered the Round 2 lottery several times, hoping one of their entries would garner them tickets. As a result, the pool of applicants was artificially inflated, generating a surge of false demand. The results of the Round 2 lottery were revealed yesterday. Right now, there are a lot of unhappy Burners who didn’t get tickets.
My Proposal -or- Not A Perfect Solution
Situations in which demand outstrips supply are tricky. For something like Burning Man, where people feel such an intense connection with the event, distributing tickets can become a very complex matter.
That being said, here’s a solution I like. Again, it isn’t perfect, but it touches on a lot of the constraints and player values.
Of the 53,000 tickets, randomly distribute 47,700 of them, for free, via a random lottery. Fair, equitable, and allows equal access to all demographics. (I got to 47,700 because it’s 90% of the available tickets).
Auction the remaining 5,300 tickets to the highest bidder. The implication here is that the average price someone would be willing to pay for an auctioned ticket would be enough to offset the tickets given away for free. In this case, that price would be around $4,000 per ticket. While that seems outrageous, I gather that there are some who would be willing to pay that much, especially if their ticket allowed nine other Burners to attend Burning Man for free.
Recap
The problem both Burners and BMORG face is too much demand for a product with limited supply. The motivations of each group are similar: attend a great event. However, the path to that outcome, for each group, are just different enough that seemingly simple problems like this become very complex, very quickly.
If you were solving the Burning Man Lottery problem, what solution would you propose?
Reblogged this on Hanuman Capital.
You may have missed two important factors. First, the shortage was minor. Last year at this time most tickets had not been sold. There were second teir tickets available for a long time after the initial rush. And they didn’t sell out until a couple of months before the event.
Second, the intense desire for Burning Man tickets by many who put a lot of money and time into creating their art or contributions to the community, only to find that they waited too long at the very end to buy their tickets made even the minor shortage appear larger and more attractive to scalpers than to most events. And nobody believed the weak messages from the BMORG about the tickets maybe selling out because the organization frequently lies and misleads about such things as when they first let people in and other things concerning admission rules.
I have a pretty wide circle of Burning Man friends and about four out of five did not get tickets. This is very unlikely to have happened since it would require an increase in demand over last year at this time of more than 5 times. Burning Man has grown over the years, but over the last 3 years only about 10%.
There is nothing unfair about first come, first serve. If they had just eliminated the teirs and sold at the average price there would not have been a great difference in price. If they had published the number of available tickets, everyone would have had several months of warning to buy their tickets.
They’ve turned a small problem into a disaster, and brought great grief and anxiety to the entire community.
umm, the tiers were $240, $320 and $390 but your point remains the same. however, I think you overlook a sense of privilege among those who pay $4000 which could lead to nasty class complications.
Ahh – thanks. Swapped a digit – fixed.
What about adding an element of meritocracy?
From my understanding, everyone is expected to bring something / do something to contribute to the community. Great. Allow for some kind of polling from the attendees for which “Burners” contributed the most positive ______ to the experience. From your accounting of the lack of credibility of BMORG and the negative comments above, I think the merits would have to be decided by the masses, lest accusations of favoritism come into play.
At this stage more conceptual than logistical, but perhaps each attendee could be allotted 7 burning man goggle stickers, one for each day of the event, and could give their stickers to whoever helps them out / has a cool artwork / whatever. Then top 10% of vote-getters get their tickets free the next year, or massively discounted, or early access. If I were to make this system more complicated / interesting, I would allow people to write brief testimonials for why they gave a sticker to someone, and allow the BMORG to publish most compelling notes for a vote. Thus, a person who is non-ostentatious but incredibly generous / helpful to a few people could reap same benefits as potentially loud “vote-for-me” people.
Ideally this would promote even more constructive community interactions.
Some of the people who got free tickets would be scalpers. They would sell those tickets and thereby massively undercut the auctioned tickets.
How about a lottery (maybe even with current level tiers) but you have to have your name on it and it’s non transferrable. Then have some other tickets available at a higher cost that could be transferred. Like plane tickets.
1) I like the idea of the previous comment – making the process of transferring tickets much harder. If you want to transfer a ticket (sell it to someone else), you should have to jump through some serious hoops (writing an essay or something, much like the application for a low-income ticket) to make it happen – weeding out a good portion of the scalpers.
2) Consider creating a second event, half a year apart. To those that say that this event would be much smaller than one giant event, I say that burning started small and stayed relatively small (relative to its current size) for a long time.
3) Awarding some percentage of tickets (50%?) based on some merit – contribution to the event, volunteering, amount of previous times gone, etc,. As to the last point (amount of previous times gone), I realize that the idea is to open it up to people that have not gone before, but creating a system that mixes a balance of newcomers and veterans might make for a great community.
4) This has not played itself out yet. Burning Man is working actively to make sure people sell tickets not through eBay or Craigslist, but through its own exchange, where tickets are sold for the price paid, thereby circumventing scalpers. Will it completely do so? No, but the community of Burning Man is honest enough that the majority of them I predict will be handled through their own ticket exchange.
Having gone to BM six times now, and feeling like a “lifer”, I can say that I have a lot of faith that things will work out just fine for most people. We shall wait and see.
Interesting approach and comments, but here are some facts that may be of interest:
Much of what one does at Burning Man takes advantage of the kindness of others; some are crews who erect art projects, many are members of what are called Theme Camps that provide services of various kinds (food, drink, entertainment). The gigantic artworks that find their ways to Black Rock City can take weeks to install and can require a dozen or more people.
Theme camps do all sorts of wonderful things, often costing thousands of dollars of contributions and scores of working members. Crucially, many camps have some key members — the guy who owns the shipping containers, the person who knows the recipe, the one who can repair the specialized sound equipment — without whom the entire project would fall apart.
For the theme camps, it is crucial that enough members, especially those who are irreplaceable, get access. Without tickets, they won’t come, nor will the big financial contributors, who may or may not be the same people.
The result of this year’s less-than-optimal approach has been that theme camps have gotten only about a third of the tickets they need. It’s a wide pool, including thousands of Burners, so you can infer that veterans comprise only a third of the lottery winners. An interesting question is who got the rest. It’s likely to be a mix of scalpers and new attendees. As veteran Burners largely abhor scalpers, it’s very likely that there will be a lot of first-timers walking around and looking for all the fun stuff they’ve read about that isn’t there because the theme camps decided to take a year off.
So the 47,000 random distribution probably wouldn’t work, cute though the idea is, because it wouldn’t do much to allocate tickets to key participants. Though considering your company’s founders and CEO all go to Burning Man, I bet the $4k tickets would go quickly.
Some other stuff about Burning Man: There are 10 principles – http://www.burningman.com/whatisburningman/about_burningman/principles.html – the first of which is radical inclusion. Some percentage of first-timers is therefore welcome.
Burning Man takes place on a dry lake bed. It’s dry because Burning Man takes place in August/September. Six months later, it’s not dry.
MANY Burners have spoken in favor of non-transferrable tickets. Holders can sell them back to the Burning Man organization for redistribution if needed. It’s a usual occurrence that somebody plans to go and then finds they can’t. The Bmorg (or Borg if you prefer, but never BM) has opposed this idea in the past on logistical grounds.
My preferred solution would be to sell half the tickets to Burners on their way out the previous year at about the cost of producing the event. The rest could be split into thirds, 1/3 at a discount to those who can prove they can’t afford the full freight and would be laudable participants, 1/3 to newbies who can also prove they belong at a premium to the cost of the event, and 1/3 to any bidder, first come-first served.
Very nice! …
Very nice!…
Looking forward to more lottery info posts soon. Regards, Sally Wendt, http://playlotto.biz