Doc gives us another example where a good is rationed via a system other than prices.
According to this recent article in the Evening Standard [h/t Josh] people in the UK must submit applications or bids (i.e. they must join a lottery) if they want to buy tickets for Olympic events in the summer of 2012. And, as most economists would predict, because the prices were set below the market-clearing levels, many people are and will be disappointed.
He quotes from the linked piece:
"Almost two thirds of applicants for Olympic tickets were left empty-handed after the public ballot, official figures revealed today.
"Games chiefs admitted for the first time that 1.2 million of the 1.9 million applications for London 2012 seats did not get a single ticket - an even lower success rate than feared."
He remarks:
There is a very simple solution to this "problem": raise the ticket prices. At higher prices, the quantity demanded of tickets would decline, and the disappointment among people who don't have tickets will be that they aren't wealthy enough to feel comfortable spending buckets of money on tickets to these events.
Relative to how much people want, resources, and thus goods, are scarce in supply at any point in time and they have to be rationed. No matter how they are rationed, some people are, by definition, going to have to do without and be disappointeed. But for some reason, and not universally, people often chaff at rationing by prices (see the healthcare debate or local water markets). I find that interesting, but I also find it puzzling. Why is it better to ration some goods, say, by politics than by prices?