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?
