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Continuous availability is good, but we also want markets to connect buyers and sellers of various sizes as efficiently as possible. Efficient not in the CS se
by dsjoerg 11y ago
Continuous availability is good, but we also want markets to connect buyers and sellers of various sizes as efficiently as possible. Efficient not in the CS sense, but in the sense of paying the middlemen as little as possible.
Discrete markets are, under certain circumstances, more efficient at connecting buyers and sellers than continuous markets. It's similar to how an eBay auction is a more efficient way to get the best price for your rare item rather than having a continuously open market where you have to keep deciding whether or not to accept people's lowball bids.
- icebraining 11y agoYet eBay has Buy It Now, because sometimes it's better for both the buyer and the seller to agree on a potentially lower/higher price than having to wait for the end of the auction. Why do we want efficient transactions? If it's for the benefit of the buyers and sellers, why shouldn't they be given the choice? It's as if we were saying that the stock market is for less sophisticated users than eBay!
- cma 11y agoOn the market you buy a fungible asset, so the auction can be batched up between multiple buyers and sellers. On eBay you can't batch the things sellers are selling because a key part of what buyers are supposed to be doing is things like checking an individual seller's feedback and weighing whether he low price is worth risking it, or carefully reading the description to make sure you aren't buying a cardboard cutout picture of the product, a product box, or a car that was sawed in half and photographed so that it could be sold to two people instead of one. Plus a lot of the products are used and have one-off descriptions of flaws. EBay doesn't have the same kind of clearing houses and broker-dealer regulations that would make sold items be anything like stock shares, even if they were all brand new and retail packaged.