Monday, January 08, 2007

Happy to see each other

Yesterday's NY Times Magazine included Dubner and Levitt on "The Gift-Card Economy", citing the well-blogged Waldfogel result on dead-weight losses from gifting. Also included was "Unconsumption: Can getting rid of stuff feel as good as getting it?" by Rob Walker (could not link this AM; their server is down).

Who would have thought that affluence could be so difficult? We have the means to acquire stuff at a faster pace than we can find to manage or enjoy it. We also have trouble buying or renting enough space. Real estate is the binding constraint.

The Walker piece alludes to recycling our many discards via Freecycle, "a Web-enabled network of about 3,900 such e-mail groups ... Save-the-earth types make up only a fraction of Freecycle users. Like any successful market place, this one works because it links people with widely disparate motivations. Some participants want to declutter. Some see it as akin to a charity. Some just don't want to lug items to the dump. And of course, many people are looking for free stuff ..."

Economists celebrate markets and transactions where buyers and sellers are happy to see each other at the market-clearing price. The Web pushes transactions costs down to a point where the folks that Walker described are also happy to see each other -- but this time at an acceptable transactions cost.