-Paradox of shopping here is surrounding oneself with superior communication links. -Exploit information imbalances in the end. -2 main. The Bazaar Economy: Information and Search in Peasant Marketing. Clifford Geertz. American Economic Review, , vol. 68, issue 2, Geertz, Clifford, “The Bazaar Economy: Information and Search in Peasant Marketing,” American Economic Review, American Economic Association, vol.

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The Bazaar Economy by Matt Lithgow on Prezi

A wide rangeof goodsofdifferent qualityandin different quantitiesor sizesat variousprices,attracts a widerangeofbuyers withdifferentindividual preferences andofdifferent economic means. On the other hand, the rarerthe good or the largerthe quantitiesbought, the fewer the precedentsto which the buyercan refer;hence the greaterthe price uncertainty for the buyer,the greaterare the seller’sopportunitiesforincreasingprofitthroughprice adjustment.

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Thereareveryfewallegations of dishonesty againstsellersof substitutable commodities. The sellersthus bazaarr the high risk of having to finance their customers’demand. By givingcreditto a buyer,a sellertriesto monopolisetheformer’s futuredemand.

Differences in quality andquantity aretherefore linkedtopricevariations. In marketsforheterogeneous,non-substitutable goods and services,in whichstand- ardsarerelatively unverifiable and uncertain,and consequentlyin whichscrupulousness is not rewardedand unscrupulousness not punished,bazaar tradeis economicallythe morerationalstrategy, indeeditbecomesa preconditionforcontinuationin themarket. I takethisasymmetry as thedistinguishingfeature of the bazaar compared to othertypesof marketsbecause it has importantstructural implicationsforthe organisationof trade.

The Bazaar Economy: Information and Search in Peasant Marketing

The last,with its glass-frontedstores,side walk cafes,and motion picture houses strungout along the main street While pricesare relativelycertainand comparable,the qualityand quantityofgoods are relativelyuncertainand difficult to compare. Branded and packaged goods thereforeallow the buyernot only to evaluate quality in relationto price,but also to be reasonablycertainthatquantityis held constant.

I shallseek to show thatthesestructural partitionsare not equally charac- terisedby behaviouralconfusionbut constitutedistincttypesof markets. Theseareeithermass-produced commodities or,in thecaseof foodstuffs, semi-perishable itemssuchasgrains,driedpulses,spicesandoils.

Frequently spaceis notenoughand theshopspillsoverintothestreet. Parryfor detailed comments on the earlierversions of the article,for whose content, however, none of them can be held liable. The particularmethodofadjustment dependson thenumberand size oftransactions. When requesting a correction, please mention this item’s handle: Apartfromincreasing it is also important thephysicalattractiveness, to makeit knownbeyonditsimmediate vicinityinordertoincrease itsmaximum demandrange: In thiscasethecontrast betweenthetwotypesofmarkets appears to be particularly sharp,moreso perhapsthanin othercases.

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Sadly, not so much anymore, given trends in both disciplines. The abilityof buyersto identify the provenance ofa goodleadsthemto expectgreater uniformity ofqualityandtherefore to exercisechoicebetweenproducts ofdifferent quality.

Standardisedpackaged goods, on the otherhand, are not sold by weight or volume but by number,and the onlyskillrequiredto verifyquantityis elementary arithmetic. Price dispersionin thebazaaris there- foreminimised. They can equally be found in developed industrialisedeconomies. In thestandardised commodity market, on theotherhand,personalloyalty is not ofthesamecrucialimportance to thebusiness organisationas in thebazaar. It is therefore bothin theseller’sandin thebuyer’sinterest to keepthepricesas low as possible,andthissharedinterest againsttheclimateofmistrust militates which prevails in thebazaar.

Specifically, the description of transactions costs in a bilateral exchange. The business ofhigglering inJamaica.

The Bazaar Economy: Information and Search in Peasant Marketing

Becausehe was unableto supplyhisown customers, theyturnedto othertraders andceasedto repay theirdebtsto him. There is a constant tug-of-warin which the buyer triesto accumulate more and more credit,and the sellerseeks to increasepricesas a formof interestand to retrievecredit,untilone of thembreaksoffthe relationship.

Examples oftheformer arepackaged,quality-controlled, andbrandedfruits andvegetablessold geertzz, andexamplesofthelatter arecounterfeit andsecond-hand products.

Thereis therefore an institutional separationbetweenwholesaleand retailbusinessesand markets, whichdoesnotexistin thebazaar,wheremostbusinesses sellto eachother as well as to consumers.

In sucha marketthestrategy of individualinspectionor intensiveinformation searchis replacedby thatof price canvassing or extensive information search Rees ;Geertz Please note that corrections may take a couple of weeks to filter through the various RePEc services. You can help adding them by using this form. But thissupposedly uniformcategoryof economic phenomena in the Third World also includes the so-called ‘show window bazaar’ in the Frenchcolonial quarterof Sefrou: Ifquality andquantityarestandardised, thesellercannot,asin thebazaar,adjust themto priceby adulterating and short-measuring, butmustinsteadadjustpriceto qualityandquantity.

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Qualityvariation betweenbrandedproducts is attributed to producers’ technicalsophistication,andpricedispersion betweensellers is attributed to differencesin traders’ commercial competence rather thanattempts to cheat.

In hisaccountofcommercein Modjokuto Geertzdoes distinguish thebazaareconomy fromthefirm-type economy The former involvestradein physically highlyheterogeneous andunstandardised kindsofcommodities inwhichthereis consequently a highdegree ofuncertainty forthebuyerin whatprecisely he buys,becauseno goodis exactly like anyothergood he canbuyfromthesameor a different selleror mighthavebought in thepast. In Geertz’sdescriptionof the bazaar trader as somebodypassingon somethinginreturnforsomethingelse,thesecrucialdistinctions between seller and buyer,and between the type of good tradedin the bazaar and money,remainunexamined.

Man, New Series, Vol. But farfrombeing an exotic businesspractice, diversification is a standardstrategyin anytypeofmarketforspreadingriskand reducing overheadcostsby fulleruse ofexistingresources. These are also theonlykindsof businesses whichhavepurpose-designed rather buildings thanrentedgeneral-purposepremises. Competition takesplacebetween sellersand betweenbuyers,but notbetweensellersand buyers.

What constitutesthe coherentclassof economic phenomenacalled ‘bazaar’ is theirapparentincoherence: Remember me on this computer. Unscrupuloustradeis thennot a functionof the actor’sethicbut of the rationality of the market Becker ; Akerlof In thestandardised commoditymarket,on the otherhand,secrecyis less crucialfor the trader,because he generallyhas less to hide.

Almosteverybody knewthathis priceswerehigherand hisqualitylowerthanthoseof hiscompetitors, andbecause everybody knewit,fewboughtfromhim.

In contrastto the bazaar trader,a sellerof standardised,substitutable goods does not have to travelto higher-ordermarketsto purchasehis supplies,find out prevailingprice levels,negotiatepurchasingpricesand arrangecredit,inspectthe goods he wantsto buy,and supervisetheirmeasurement,packagingand transport; nor does he have to choose between havingto relyon unreliableemployeesto keep his shop open in the meantime,and stayingin the shop himselfwhile delegatingthese tasksto a potentiallyfraudulentemployee.

FANSELOW Quality standardisation In thebazaarthereareno verifiable andreliablestandards ofquality, andthemanipu- lationof qualityby mixinginferior with superior products or through outright adulteration with alien substances bazaaar believed to be endemic. In thecase of markets in non-standardised goods,theabsenceofa reliablemeansofqualitative and quantitative verificationleadstoa generallossofconfidence, bringing abouta situation inwhicheveryone accuseseveryone elseofchicanery.