The Inner Lives of Markets

Markets

Buying and selling are part of human nature. Markets give people a way to assign value to goods, services and experiences, as well as to obtain what they want. The free markets central to established economic thinking operate through buyers and sellers interacting directly to set their own prices and make their own exchanges. This system creates desirable outcomes in theory, but – in reality – it often yields unwanted results. In contrast, the market makers emerging in the early 21st century, such as eBay, design platforms with rules to bring together buyers, sellers, payment providers and other parties. While these still-evolving marketplaces enable buyers and sellers to conduct transactions smoothly, these platforms call for new economic and social understanding.   

Trade Is Intrinsic to Human Behavior

An informal market arose in German prisoner of war (POW) camps during World War II. The Red Cross delivered packages to the camps containing equal amounts of commodities such as canned milk, chocolate, sugar, coffee, soap and cigarettes. Because individual inmates did not value all the items the same, prisoners...