A great story at the Wall Street Journal highlights a hopeful trend where people post tasks online and others complete them for payment. Think of it as craigslist for errands. I view this as a positive move towards a world where previously lost gains from trade are finally taken advantage of. I don’t know if it’s just me or if all economists see the world this way, but I walk around constantly surprised and saddened by missed opportunities at gains from trade. As important as the techonological innovation here, I see this as social progress in the direction of making micro-markets socially acceptable.
For instance, at a concert I’ll see someone sit in front of me with a beer, and I really want a beer but don’t want to walk to and wait in line, and I’m pretty sure his beer is worth more to me than it is to him. But a lot of people would see it as rude to tap him on his shoulder and offer to buy the beer from him. Or a guy in a movie theater is laughing loud and obnoxiously, and I feel like I’d be willing to pay him more to leave than it’s worth for him to stay. But I know that exchange wouldn’t go well.
A lot of possible exchanges in fact would be seen as lazy, offensive, repugnant, and generally low-status to offer to strangers or friends. For instance paying someone to cut in line or take their reservation at a restaurant, or paying a friend to do a simple chore for you like take out the trash or clean your bathroom.
I also sometimes comfort myself knowing I would be outbid in micro-markets. If I’m two minutes late for a train and I find myself thinking “surely the welfare gain to me of them waiting two minutes is bigger than the loss to all the other passengers for being two minutes late!”. But then I consider an auction where I had to buy off every riders’ extra two minutes, and I know I would not win that auction, which I find comforting in a way. When micro-markets like the one I imagine here are real and widespread people will have a less hard time deluding themselves like I initially do. The angry guy in line behind you in line who is mumbling about how late he is running will have less grounds to be angry if he can offer you to buy your place in line but it is not worth it to him.
“Argh! I’m so late, I should be ahead of this guy in line in front of me!”
“My place in line is worth $8 to me.”
“Oh, well being ahead is only worth $7, so I guess I shouldn’t be ahead of you”
I don’t know what it is about some exchanges that make them low-status or repugnant, but I think micro-markets will erode the stigma until everything is up for sale that should be (some people would be willing to pay a lot of money for particular markets not to exist at all, and these markets are more efficiently left non-existent, but what if the market to determine this is also more efficiently left non-existent?). It will be an economist’s world, and I’m sure some people won’t celebrate it but the world will be a better place.