An ethical dilemma

One of my wonderful contacts on Yahoo! Answers posed an interesting query regarding an ethical dilemma, which I answered. Unfortunately, the answer length limit prevented me from actually posting my answer to the question, so here it is.

For those that want to read the actual question, please see: http://answers.yahoo.com/question/index;_ylt=Aok9OZSgvJZpjMHrsjCoc5Tsy6IX;_ylv=3?qid=20130412015417AAIKJbb

My answer:

Recognize that whatever you do in this situation, you only have n number of passes, and there are m number of people (m > n) who want the passes. A maximum of m - n number of people will be unsatisfied, regardless of what you do, with a minimum number of 0 people being unsatisfied (or at least net unsatisfied) depending on approval of how you allot the passes.

You first need to examine the personal financial aspect. As you note, you don't want to personally profit off of the passes, but at the same time you don't necessarily want to take a loss on them either. Given that this isn't money you need (as if it were, you wouldn't have purchased what's essentially a luxury good with it), I don't think you should give the loss mitigation aspect much consideration at all in your decision. One way to look at it is that you're already getting something that's more valuable to you by not attending (otherwise, you would be attending), and you were willing to pay whatever the cost of the n passes was for something of comparatively less value to you. Obviously, what you're getting instead wouldn't have cost you that much money if we were examine things before the decision to purchase the passes, but we are examining things after your decision to purchase the passes instead, not before.

Given that you're getting *at least* the value of the passes by merely not going, the considerations regarding what to do with the passes should be less hindered by any financial aspect on your end. Now for some more points of consideration.

Are the friends who wanted you to give them the passes for free genuinely needy, or could they have afforded the passes if they had wanted to? Obviously, they at least have the financial means to trek to and back from wherever this place is (about 1000 miles and 16 hours in total, as per Google maps). Assuming that they can find a 4-passenger vehicle (full, and splitting gas cost equally) going there that gets 30 mi/gal, the price of gas is $3.500/gal, and they purchase some food and beverages during the car ride, that works out to them having at least ~$50 to spend on a whim. That's not so much, so maybe they really are genuinely needy; you'd know better than a person on the internet who doesn't know them at all. You're obviously considering this option, which further suggests you don't really mind taking a complete loss on the tickets.

Another point of consideration is that if you sell the tickets to the highest bidder, you can use the additional money towards something productive. Even if you only sold the tickets for your cost and donated the money, depending on how wisely you donated the money, the benefit could be immense (albeit perhaps not fully directly experienced by you, then again, research suggests this would make you happier than if you had just spent the money on yourself anyway, so it's not a bad a trade at all). A few dollars donated to a charity that primarily serves Africa, as an example, can pay for a mosquito net that prevents a child from dying due to malaria, or pay for a pair of shoes (which prevents various illnesses/diseases, as well as injury), or make a significant contribution to a child's education (~1 year of schooling would cost only about $30), or any other number of huge benefits. n*349 dollars would obviously have a much larger impact. n*(349 + A) where A is the average additional money you make by selling them to the highest bidder would have yet an even greater impact.

At this point, it's fair to compare the option of selling the passes and donating the proceeds versus giving them away. Is the benefit your friend(s) would get from the passes equal to the equivalent benefit that could be gained by many other people through you donating the money to a charity? Almost certainly not; your friends have at least ~$50 to blow on a non-essential fun activity (not even considering all of the advantages they obviously have just by mere geographic location, or any other advantages), and the people who the proceeds could benefit might legitimately answer a question like "If you have $50, then what?" with "If I had $50, I would be rich". From your perspective, you'd probably be (by a very rough approximation) equally happy with either alternative here, but the net global change in suffering versus happiness towards the side of happiness is clearly tilted way, way, way, towards the side of donating the proceeds, to say nothing of the fact that another person will still get to enjoy the benefits that come along with your passes (presumably, also one of your friends).

I'm not sure I'd even take the idea of a lottery seriously. There are no real advantages to using a lottery system to allocate a scarce luxury good, from an ethical standpoint, or from an economic standpoint, or any other standpoint I can think of. That's sort of hyperbolic of course, because the "big" advantage of a lottery system is that it's fair to all of the immediate parties involved, and while some people may feel disappointing, they won't feel slighted by you. Then again, assuming your friends are reasonably intelligent and compassionate people, I doubt they'd feel slighted if you sold the tickets to the highest bidder and donated the proceeds to a charity. The reason I say I wouldn't take the idea of a lottery seriously is in part because of the analysis I just gave, and partially because, as a rule, can you think of any situation where the most ethical way to distribute a scarce good is by lottery? Even a hypothetical scenario? The only hypothetical scenarios I've ever seen or been able to think of are really contrived (like, scarcity + need + no ability of any parties to pay + no other reasonable options at all, and usually all the possible parties in these scenarios are quite similar), and don't involve any other options that are even remotely good as far as distribution goes.

I'd personally pick the option of selling the passes for as high as you possibly can, and donating the proceeds. In fact, I'd suggest getting (emotionally charged information / pictures) about the cause you'd plan to donate to, and let everyone know about that before/at the same time you start your auction, to drive up the price even more (essentially, donation by proxy, as it's unlikely whoever is buying them would have donated that extra money anyway--it's just human nature, and not really something that people can be blamed for).