-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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Specifically, the description of transactions costs in a bilateral exchange. Skip to main content. Such shopshave no secretgodowns aroundthe cornerin whichgoods are concealedfromsalestax and pricecontrol officers.

TheKalakkadu bazaar In thefollowing I shalltryto applythisanalytical framework to explainsomeofthe complexity ofthebazaarin Kalakkadu, a smallcommercial townin thesouthIndian stateofTamilNadu. FANSELOW stores’;streetsidestallssellinglotteryticketsare ‘luckycentres’,a chemist’sshop a ‘medicalhall’; and textileshopscanbe ‘cutpiece centres’, ‘readymade’,’silkemporium’, ‘handloomhouse’,or ‘shirting and suitinghall’.

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

Similarprinciplesapplyto marketsin real estate and labour Stiglitz; Rees Only undersuch conditionsdoes bargainingbecome an importantprice- makingmechanismin the bazaar. Evenin suchlower-level markets as Kalakkadu, thereis a comprehensive folklore aboutthecomparative advantages anddisadvantages oftherelatively limitednumber ofbrandedgoodssold.

Iftheirsourcecanbe identified, theyareeasilypunished becausetraders themselvesarelessaccessibletoblackmail byemployees thanarebazaar manyofwhosebusiness traders, operations areillegalso thatin caseofdisputes legal remedyis usuallynotavailableto them. It seems thereforemore than coincidence that all Geertz’s examples of firm-type Muslimsin Modjokuto deal in homogeneous,standardised businessesrunby reformist and substitutablecommodities.


While in the bazaar business expansion is limitedby the number of buyersabout whom the traderhas enough personalknowledge to be able to assesstheircreditworthiness and forwhom he has enough capitalto sell on credit,in a marketdominatedby cash paymentsa sellercan attracta potentiallyunlimitednumberof customers. Sincehissonswereawayhe relied exclusively on employees. In thebazaarthescopeforbusiness expansion isseverely limited bytheuncertainties ofhavingtosellon creditandhaving to relyon potentially fraudulent employees.

In thebazaartransaction, on theotherhand,wherethebuyer hasonlyverylimitedopportunities to ascertainqualityandquantity priortopurchase, itis thesellerwho is accusedofdishonesty. This typeof organisational environment greatly reducestheoperational scopeof middlemen, geerta traders who arecharacteristic ofthe bazaar. Compared to money, they are of relativelydubious quality,of indeterminate quantityand thereforeof uncertainvalue. Click here to sign up.

Log In Sign Up. But thereis a buyer and a seller in every transactionin thebazaar,andbyvirtueofoccupyingtheseroles,theformerisstructurally bazaar operateunderconditionsof greateruncertainty thanthelatter. In contrastto cheques, invoices,etc. Money is a verydifferent kind of commodityfromthe goods tradedin the bazaar.

They thusprovideefficient channelsof communication betweenproducersand consumers, whichare independent of the chainof intermediary tradersand middlemen. Most oftheirtransactions areconductednotthroughofficialchannels,buton an interpersonal and cash basiswithoutany documentation. One reason why some economistsand economic anthropologists see the bazaar as approachingthe model of theperfectly competitivemarketis the apparentabsenceofmonopolisticcompetition.

More about this item Statistics Access and download statistics. The only effective meansofensunrng suchpersonal loyalty aretiesofkinship.

Suchagentsareappointed byparticularproducers inwhosenametheycanvass localtraders forordersforwhichtheyarepaidon a fixedcommission basis. Moneymarket Similarconditionsof uncertainty prevailin the marketforbusinesscapital.


Ifquality andquantityarestandardised, thesellercannot,asin thebazaar,adjust themto priceby adulterating and short-measuring, butmustinsteadadjustpriceto qualityandquantity. They are less valid fortradein food grains,oilseeds, and sugar In fact,therefore, price competitionis minimisedin the bazaar.

In contrast tosucha maverick environment inwhichalmosteverything isuncertain, inthestandardised commodity market, brandnamesandtrademarks actasclassificatory devicesby whichtheprovenanceof goodsin themarketbecomesidentifiable and therefore theirqualitymorepredictable.

Geertz – Bazaar Economy

Consequently thereisno channeloffeedback betweenproducer and consumer decisionsindependent ofthechainofintermediary traders. Introduction There are two common theoreticalapproachesto the bazaar. A formof organisationalinnovationin which ownershipand managementare only partiallyseparated,but where thereis neverthelesssubstantialdelegationof management,is the establishment of subsidiary outletsor branches.

Competition takesplacebetween sellersand betweenbuyers,but notbetweensellersand buyers. As examples of such homogeneous productseconomistsoftenmentionsupposedlyundifferentiated raw materials,such as wheat, potatoes or cotton e.

The Bazaar Economy: Information and Search in Peasant Marketing

Sellersseek not only to egertz quantity,but also price. RePEc uses bibliographic data supplied by the respective publishers. 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.