week left down here), I'm doing three things.
First, I'm trying to finish off a couple final interviews, to be able to
come back to the states with a pretty strong idea of what's driving
Guatemalan forestry outcomes. I think I have a good handle on things
down here, and I know that in the time I have remaining I won't be able
to do all of the things I would like to do, but everything about this
process is a story about finding the optimum tradeoff.
Second, I'm missing home and Emily, and really looking forward to
getting back to the states for a little while. Missed our anniversary
while down here, but Emily and I are planning a replacement anniversary
and a trip to the Tetons for a couple of days during Labor Day. Plus,
I'm really looking forward to sleeping in my own bed for a while, and
getting a cup of tea and some good strong coffee.
Third, I'm doing some Christmas shopping. I know it's early, but it's
not often that you can buy hand-woven Guatemalan textiles for a
reasonable price.
So I bought a couple of things today--one blanket, and a couple of
tablecloths. Beautiful, all of them.
But in the process, I had to haggle, which I hate, because I'm terrible
at it. I've got the wrong cultural upbringing, the wrong skin color,
and the wrong sense of imperialist guilt to be any good at it. So I
inevitably get a poor deal.
But the process of haggling, which is commonplace in most transactions
down here, gave me some food for thought. In some ways, doesn't a
market imply the flow of complete information about the price of a
good? If prices are such an important part of the process of
interacting in a market, in what ways do economic models of these
interactions miss what goes on in places like Guatemala, where there are
often no set prices? What happens when cost is not a result of only
supply and demand, but also (a) my haggling skills, (b) the cut of my
clothes, and (c) the ability of the hawker to size me up for what I'm
worth...
Just a lot of questions without any real answers, and without a strong
enough understanding of microeconomics to be able to make any hypotheses
about these questions.
3 comments:
Well in a large marketplace with a number of vendors selling a range of relatively differentiated products (varying quality and quantity) there is actually a fairly narrow price range. Each seller has some (private) reserve price beyond which they won't haggle anymore. If I had to guess I would say that reserve price is really close to identical for every vendor. Not to mention that the vendors face a serious coordination problem that (at least partially) prevents them from collaborating on a fixed price, even if the goods are undifferentiated.
Bullshit. Microeconomics and undifferentiated goods has nothing to do with it. You, my dear Glenn, are always going to get a bad deal. You have a handlebar mustache, the epitome of imperialism - Ferdinandesqe even.
I would therefore hesitate to derive any hypotheses.
Someone is just asking for a shot of microeconomics into their own blog. Totally inappropriately of course.
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