-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 reasonwhy the role distinctionbetween buyerand selleris not partof the economic discourseof the bazaar seems to lie in the empiricallyhigh incidence of the combinationof the roles of buyer and seller in the same person, namelythemiddleman.

This resultsin the fragmentation of businessestypical ofthebazaar. Click here to sign up. There, the equivalentoftheshoppingdistrict in theformerFrenchquartersin Sefrouis thatsetup bytheDutch colonial government As the access to this document is restricted, you may want to search for a different version of it.

Becausehe was unableto supplyhisown customers, theyturnedto othertraders andceasedto repay theirdebtsto him. Pricedispersion There is a fundamentaldifferencebetween the geerrz marketsin unbranded, ungradedand loosely sold commodities,and those in branded,standardisedand pre- packaged commodities.

Fanselow Reviewed work s: Justas a geerrtz the standardisedcommoditymarketis less dependent on the personalloyaltyof his employeesand partnersthan a bazaar trader,so he is also less dependent on the personal loyaltyof his customersbecause credit sales are rare.

The standardisationof productqualityand quantity is a conditionforproduct whichbalancestheinformation substitutability, asymmetry betweenbuyerandseller andthereby becomesa precondition fortheefficient functioning ofthepricemech- anism.

Standardisedpackaged goods, on the otherhand, are not sold by weight or volume but by number,and the onlyskillrequiredto verifyquantityis elementary arithmetic. But thissupposedly uniformcategoryof economic phenomena in the Third World also includes the so-called ‘show window bazaar’ in the Frenchcolonial quarterof Sefrou: The bazaar economy or how bizarre is the bazaar really?

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

But he considersthisrelationshipbetween traderand non-traderas atypicalofthebazaar,where the commonestrelationship is thatbetween traders middlemen. The buyergets,forexample,two packetsof coffeepowder each weighing grammes,insteadof or grammesweighed and packaged by the seller. We use information technology and tools to increase productivity and facilitate new forms of scholarship. The wholeself-perpetuating andself-sustainingsystem ofindependent middle- menandbrokers in thebazaardependson theirability to passon goodsofuncertain provenance, dubiousqualityandindeterminate quantity to eachother.


The only businessin Kalakkaduto sell unstandardised, non-substitutable commoditiesand in which managementis separatedfromits public ownership,is the government rationshop.

There was a time in which anthropologists and economists really could learn from one another. Apartfromincreasing it is also important thephysicalattractiveness, to makeit knownbeyonditsimmediate vicinityinordertoincrease itsmaximum demandrange: What constitutesthe coherentclassof economic phenomenacalled ‘bazaar’ is theirapparentincoherence: These are also theonlykindsof businesses whichhavepurpose-designed rather buildings thanrentedgeneral-purposepremises.

In fact,therefore, price competitionis minimisedin the bazaar. Theirfunction is insteada prestige-raising device,which hasbecomeso pronouncedthatin theGovernment ofTamilNadu saw it as a threatto theTamil languageand issuedan ordinancethatall shop and businesssignsmustfirstand foremost be in Tamil ratherthanin English.

In such cases thereis an interdependencebetween the two, since the sellerdepends on the buyer’srepaymentand can apply the threatof refusingfurthersuppliesas a sanctionagainstdefault. Agricultural products andindustrial canbesubstitutable products canbe non-substitutable.

In geetrz oflargenumbersoftransactions, each ofverysmall volume, adjustmentsin quantityare more profitablethanprice adjustments, because the profitis primarilya functionof the numberof transactions-moreparticularly of the acts of measurement-ratherthan of the size of the transactions;thereforethe higherthe numberof transactions, the greaterwill be the savingsin stock. 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.

Geertz considersthatthe crucialdifferences between the bazaar business and the firm-type businesslie in formalorganisationalinnovation,thepermanenceof businessorganisation,the reliabilityof relationshipswith producersand distributors, and the expansionof the urbanpublic market Geertz The primary competitive relationshipis that ofthesellerversusthebuyer.

Enter the email address you signed up with and we’ll bwzaar you a reset link. TheKalakkadu bazaar In thefollowing I shalltryto applythisanalytical framework to explainsomeofthe complexity ofthebazaarin Kalakkadu, a smallcommercial townin thesouthIndian stateofTamilNadu. These functional differences areparalleled,in turn,by different organisationalstructuresof businessand market.


The Bazaar Economy: Information and Search in Peasant Marketing

A formof organisationalinnovationin which ownershipand managementare only partiallyseparated,but where thereis neverthelesssubstantialdelegationof management,is the establishment of subsidiary outletsor branches. But theyremainso onlyas long as theyare ‘brand’new.

Insteadoftravelling tothesupplycentrehimself ordelegating an employee to do so, he can orderthemfromdistributing agentsoftheproducer.

Bazaar tradersare unwillingand oftenunable to providethese. In a transaction inwhichthebuyerhasthe opportunity to ascertainwhatis on offer, themoral-as wellas thelegal-principle ofcaveat emptor applies,andifhe doesnottakeadvantage ofthisopportunity, he has onlyhimself to blame.

There thereforeexistsin the bazaar transactionan informationasymmetry betweentheseller,who passeson somethinguncertainin returnforsomethingcertain, and thebuyer,who does thereverse.

Externallya businessis orientedto be encompassing ratherthancompetitive, and internally it tendstowardsfragmentation as employees turnintoentrepreneurs, whoruntheirownbusiness withintheiremployer’s business. The particularmethodofadjustment bszaar thenumberand size oftransactions.

Geertz – Bazaar Economy

Such marketsare not bizarreand exotic phenomena,a massof namelessgoods and shops and countlessmiddlemenof limitlessunscrupulousness. A completeseparationof managementand ownershipagain occursonly in the stand- ardisedcommoditytrade. The flowof goods is dividedinto countlessmeanderingstreamsof smallvolume but perennialnature,because the goods are in constantdemand and divisibleinto tiny amounts.

Theseareeithermass-produced commodities or,in thecaseof foodstuffs, semi-perishable itemssuchasgrains,driedpulses,spicesandoils. While emphasisingthislackofbusiness specialisation,Fox also describesoverspecialisation of businessesas anotherpeculiarity of the bazaar: It might well be correctthatthe two are not distinguished in Sefroufolkeconomics: Most oftheirtransactions areconductednotthroughofficialchannels,buton an interpersonal and cash basiswithoutany documentation. Help Center Find new research papers in: Wholesaling and retailingare institutionally separatedand while relationshipswith wholesalersare enduring,relationshipswhich involve retailtransactionstend to be ephemeralbecause theyare on a cash basis and thereforedevoid of the element of enduringinterdependence,which formsthe basisof creditrelationships in the bazaar.

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