-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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Search is accumlative — once you find someone you like you continue to go there. In thebazaarthescopeforbusiness expansion isseverely limited bytheuncertainties ofhavingtosellon creditandhaving to relyon potentially fraudulent employees. Pricedispersion There is a fundamentaldifferencebetween the structureof marketsin unbranded, ungradedand loosely sold commodities,and those in branded,standardisedand pre- packaged commodities. Obtainingproducers’catalogues, inviting itinerantcommission agents, and establishing contactswithregionaldistributing agentsare amongthe various methods usedto monitor market developments andcanvassthemaximum numberof priceoffers.

The sellersthus divestthemselvesof the high risk of having to finance their customers’demand. The greaterimportanceof skilland experienceover personalloyaltyin the labour marketincreasesthe potentialforbusinessexpansion and can ultimatelylead to the separationof managementfromownership.

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 gerrtz he canbuyfromthesameor a different selleror mighthavebought in thepast.

Help us Corrections Found an error or omission? In additionthereare professionalblack markettraders,who buy the rations-and sometimesthe rationcards-from people who do not need them,either because theyare too poor to affordrationgoods even at subsidisedprices,or too rich to need them,and who thenbulk and resellthemto privateshops.

In Geertz’s terms,’the man’ who is passingon goods in returnformoney is far more certainof what he receives,than ‘the man’ who is passingon money in return forgoods. Thus thelogicalcorollary of thepricesystemis an accurateand verifiable system of measurement and qualitycontrol.

The sliding price system, accompanied by the colorful and often aggressive bargaining which seems to mark such systems everywhere, is in part simply a means of communicating economic information in an indeterminate pricing situation.

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While price differencesare only veryimperfectly relatedto qualityand quantity variation,theyare closely relatedto differences in buyers’ commercialcompetence and marketexperience,and theirwillingnessto bargainwith and canvass geeetz sellersin orderto testthe market: As examples of such homogeneous productseconomistsoftenmentionsupposedlyundifferentiated raw materials,such as wheat, potatoes or cotton e.

In contrastto cheques, invoices,etc.

Transactions Costs in Strange Places: Geertz on the “Bazaar Economy” of “Modjokuto”

In contrast tosucha maverick environment inwhichalmosteverything isuncertain, inthestandardised commodity market, brandnamesandtrademarks actasclassificatory devicesby whichtheprovenanceof goodsin themarketbecomesidentifiable and therefore theirqualitymorepredictable. Introduction There are two common theoreticalapproachesto the bazaar. The kindsof goods tradedin the bazaar,on the otherhand, are unstandardisedand thereforeunpredictableand unreliable; their inspection is difficult,time-consumingand thereforecostly.

But thereis a buyer and a seller in every transactionin thebazaar,andbyvirtueofoccupyingtheseroles,theformerisstructurally positionedto operateunderconditionsof greateruncertainty thanthelatter. Fox, forexample,mentionsin passingthatbetweenthetwo categoriesofbusinesses distinguishedhere,profitmarginscan differby more thanfivehundredper cent. Since bazaar tradersmustmaintainsecrecyabout theirbusiness operations,formalbureaucraticsources of businesscapitalsuch as low interestbank loans and overdraft facilitiesare largelyinaccessibleto them.

Enter the email address you signed up with and we’ll email you a reset link. This forcessellersto competeby adjusting pricesratherthanby makingstocksavingsthrough adulterationandshort-measuring. In thestandardised commodity market, on theotherhand,personalloyalty is not ofthesamecrucialimportance to thebusiness organisationas in thebazaar. The greatmajority and the financiallylargestand most profitabletransactions in Kalakkaduinvolve non-perishablegoods.

Two most important search procedures are clientelization and bargaining. Ifquality andquantityarestandardised, thesellercannot,asin thebazaar,adjust themto priceby adulterating and short-measuring, butmustinsteadadjustpriceto qualityandquantity.

The Bazaar Economy: Information and Search in Peasant Marketing

Moneymarket Similarconditionsof uncertainty prevailin the marketforbusinesscapital. Standardisedpackaged goods, on the otherhand, are not sold by weight or volume but by number,and the onlyskillrequiredto verifyquantityis elementary arithmetic. These shops oftencarrysignswhich declarethattheirstock of goods is ‘hypothecated’to a certainbank; theirdebtsare thuspublic knowledge and it would be difficult forthem to obtainmore thanone loan on thebasisofthesame security. This typeof organisational environment greatly reducestheoperational scopeof middlemen, brokersandallkindsofintermediary traders who arecharacteristic ofthe bazaar.

Cet articlemontreque le ‘bazar’ de categoriefolkloriquedissimulela distinction analytique entredeux typesde marche: In contrast,thecentral intermediary in thestandardised figure goodsmarket is the agentwho,as thetermindicates, actson behalfoftheproducerandnoton hisown behalf. Mines, and Drs C. Theyaretherefore ableto comparenotonlythequalityofdifferent brands, butalso to evaluatetheirqualityin relationto theirprice,an operationwhichis extremely difficultin thebazaar.

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Their stock of goods providesa securityforloans because itsvalue is relativelyreliableand verifiable and much ofit is publiclydisplayedratherthanhiddenaway in secretgodowns. Almosteverybody knewthathis priceswerehigherand hisqualitylowerthanthoseof hiscompetitors, andbecause everybody knewit,fewboughtfromhim.

Iftheirsourceis notidentifiable theycanbe addedto priceas extracost,rather thanremaining an unquantifiable drainon capital whichonlysurfaces whenthebusiness finallycrashes.

Resume Des critiquesdes vues que le bazar est un modele de marche compeitif le depeignentsouvent comme exotique et irrationnel. Advertising In contrast to theexcessivesecretiveness ofthebazaarwhichbothgrowsout ofand seedssuspicion, buyersin thesubstitutable commodity market arefloodedwithinfor- mation.

The price mechanismdoes not operate in relationto raw materialsas such,but in relationto materialsartificiallystandardised in termsof an imposedsystemof classification. Since thereis no separationbetween wholesalingand retailingin the bazaar, the majorityoftransactions are baazaar betweenretailersand consumers,but betweenmiddle- men.

The structuralpartitionhere refersto the physicaldivisionof the ‘bazaar’ into theweeklymarketheld outsideSefrou,the traditionalbazaarin the old town,and the ‘show window bazaar’ oftheformercolonial quarters;thebehaviouralconfusionrefers to the general uncertaintywhich supposedlyoccurs equally in all three structural partitions.

It seems thereforemore than coincidence that all Geertz’s examples of firm-type Muslimsin Modjokuto deal in homogeneous,standardised businessesrunby reformist and substitutablecommodities. But thisis irrelevant to the operationof theprice system, whichisnotconcerned withthephysical properties ofthegoodsinvolvedbut withtheactors’beliefsaboutthemandtheirdecisionsbasedon these.

The only effective meansofensunrng suchpersonal loyalty aretiesofkinship. The mostcommon exampleis themarketforused carsin which quality uncertainty is veryhigh,even thoughprice dispersionis small Akerlof; Stiglitz ; Rees ; Geertz The twotypesofcommodities differ in termsoftheirtransactional propertiesand therefore in thekindsof functionsperformed by businesses tradingin them.

Striking a bargaininJavanese markets. bqzaar

Sincepricedispersion betweensellersandqualityvariation betweenbrandsappear tobe clearly identifiable, buyers do notgenerally consider themasforms ofdeception, as theydo in thecase of non-standardised goods.