Julian Sanchez and Lynne Kiesling say very rude things about Bob Geldof’s campaign to stop the sale of tickets to the Live-8 concerts on eBay (BBC story here). Julian describes this as “idiotic” and Lynne describes it as “wooly thinking about economics.” It’s neither. There’s an excellent rationale for what Geldof did. The tickets were initially distributed through a lottery, in which people sent instant-text messages to an address for a fee; a small percentage of the two million who sent the messages got tickets. It’s safe to assume that those who participated in this lottery did so for a mix of reasons; partly charitable, partly a desire to go to the concert. But altruistic motivations can be driven out by market mechanisms. Richard Titmuss wrote a famous book a few decades ago, The Gift Relationship, which provided a fair amount of empirical evidence to show that this was true in the case of blood donations, and that purely voluntary systems of blood donation did better on a variety of counts than did systems where some people were paid to donate blood (see also this paper by Kieran which touches on Titmuss’s arguments). On this logic, Geldof did exactly the right thing. If tickets to the concerts became commodities to be bought and sold on the open market, it’s highly plausible that future participation in lotteries of this kind would be seriously hurt. Geldof’s actions are perfectly defensible.