Scarcity & Queues Entry #0474 Classified Declassified

The reason free tickets are less used than paid ones

A paid ticket creates something to waste. A free one leaves nothing behind if the evening turns out to be raining and the sofa is closer.

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Plate 481 — Four hundred tickets, a hundred and ninety chairs

Intuition test — answer before you read on

Why can charging a nominal price raise actual use of a good?

Four hundred free seats distributed for a Tuesday lecture and a hundred and ninety people in the hall. The same lecture at a nominal charge fills the room. Nobody who stayed home had a better offer; they had nothing they were failing to use.

What everyone sees

A giveaway is treated as removing a barrier, so attendance should approach the number of tickets issued. Price is not only a barrier. It also creates an account with something in it, and it screens for people who were willing to give up something to be there, which the free version by construction does not do.

What is actually happening

Ashraf, Berry and Shapiro ran a field experiment on household water treatment in Zambia and found evidence for a screening effect, with buyers at higher prices more likely to be households that actually used the product — charging a price sorted for intended use. Cohen and Dupas found close to the opposite in a randomised bed-net study, where free distribution did not meaningfully reduce use and reached far more people, so total protective use was higher when the price was zero. The honest summary is that the effect is real but conditional. Where the good requires effort to use and the pool of recipients is wide, price screens for follow-through; where use is easy and coverage matters most, zero price wins on volume and the screening loss is small.

Why it stays hidden

The gap hides because both metrics look like success. Distribution reports tickets issued and the hall reports attendance, and the difference between them is recorded as no-shows — a term that describes the outcome and names no cause. Nobody logs the moment the ticket stopped feeling like something that could be wasted.

A price creates something to waste and screens for intent. Whether that beats reaching more people depends on how much effort using the thing takes.

A price creates something to waste and screens for intent. Whether that beats reaching more people depends on how much effort using the thing takes.

The hidden part — entry #0474

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A price creates something to waste and screens for intent. Whether that beats reaching more people depends on how much effort using the thing takes.

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Sources & further reading 2
  1. Ashraf, Berry & Shapiro — can higher prices stimulate product use? evidence from a field experiment in Zambia
  2. Cohen & Dupas — free distribution or cost-sharing? evidence from a randomized malaria prevention experiment

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