As someone who's been to many first round games, the arenas are mostly full of people there just to watch basketball. Unless you are significantly close to a school, it's not often an arena is full of people rooting for the teams actually playing. So if a team loses, you aren't going to see a bunch of tickets go on the market - unless perhaps it's a local team. But a majority of tickets are sold prior to team's being announced, so it's not like 10,000 people bought tickets hoping Wisconsin would play and since they're not there, they aren't interested in going. The school allotments only account for about 10% of the arena capacity.
That being said, Minnesota, Iowa State and Purdue all have healthy fan bases in the surrounding areas and could have some demand. I'd expect prices to go up - especially as there aren't a ton of tickets on the market for such a large arena.