Beyond Substitutes

.title[
# Beyond Substitutes
]
.subtitle[
## The Complementary Relationship Between Markets and Commons
]
.author[
### <img src="images/cover4_png2.png" style="height:20.0%" /><br><br> Kumar Aniket   |   17 June 2025
]

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# aniket.co.uk/pres/

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# Relationship between markets and commons?

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# Relationship between markets and commons?

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### Characteristics of the space <br> over which markets operate?

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# Market

&nbsp;

## Kerala Fish Market

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# Coastal Fish Market in Kerala

Fish is the staple diet in Kerala, India

Kerala has a long coastline with fish markets dotted along the coast

Fisherman have a .emob[choice] of which fish market they land their fish in

They do not .emob[know] the .emob[price of fish] in each market on a particular day

]

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# Kerala Fish Market

Jenson (2007) studied of .emob.fs120[15 fish markets] along the 225 km .emob.fs120[Northern coast of Kerala] to understand whether the market for fish was working.

.footnote[
Jensen, Robert (2007). The digital provide: Information (technology), market performance, and welfare in the South Indian fisheries sector.” The quarterly journal of economics.
]

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# Kerala Fish Market

.fade[Jenson (2007) studied of 15 fish markets along the 225 km Northern coast of Kerala to understand whether the market for fish was working.]

- Fisherman had to .emob[choose] the port/market where they would get the best price for their catch

- Fish merchants .emob[bought] the fish from the fisherman and sold it to the consumers

- If fish merchants already had enough fish on the port they landed, the fisherman would just .emob[jettison] their catch

Fish .emob[prices] were .emob[volatile] and fisherman’s .emob[profits low]

]

due to .emob[wastage] and .emob[ex-post bargaining power] of fish merchants who bought from the fisherman and sold to the consumers

]

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class:top,center

### Market Conditions on 14th January 1997 in the Fish Markets

.tack.mygraph[
<img src="images/lec3/f0.jpg" width="80%" style="display: block; margin: auto;" />
]

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class:center,top

### Average market price across markets

.emb[Excess supply] .tab[] | .tab[] .emd[Market Clearing] .tab[] | .tab[] .emb[Excess demand] 
:---:|:---:|:---:
.emb[₹ 0] | ₹ 5.9 | .emb[₹ 9.3]

.tack.mygraph[
<img src="images/lec3/f0.jpg" width="80%" style="display: block; margin: auto;" />
]

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class:center

## Sequential roll out of mobile phone coverage

.tack.mygrapha[
<img src="images/lec3/f1.png" width="60%" style="display: block; margin: auto;" />
]

---

class:center

## Introduction of mobile phones

.tack.mygrapha[
<img src="images/lec3/f2.png" width="70%" style="display: block; margin: auto;" />
]

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# Market Efficiency

Introduction of mobile phones made the fish market more efficient

&nbsp;

-  Reduced waste & elimination

-  Sharp decrease in price volatility

-  Fisherman’s profits went up by 8%

-  Consumer prices decreased by 4%

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## Adam Smith's insight

.center.tack.w75[
.center[Well-functioning .emob[markets] are Pareto .emob[efficient]. ]
]

.center.w75[
That is *all mutually beneficial trades are undertaken* and no trades than can make someone better off without making anyone worse off are left unexploited.]

## Unanswered question

.center.tack[

How do the buyers and seller .emob[find] each other?

Who .emob[owns] the space where the buyers and sellers meet?

]

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# Co-incidence of location

**Before mobile phones**

it .emob[required co-incidence of location] to exchange price information
]

**After mobile phones**

price information **flowed** through a .emob[different space]

]

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# Co-incidence of location

]

**Payment systems** free people from co-incidence of location

Co-incidence of location remains for **goods**

]

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## Coda

### Kerala Fish Markets

Atypical example because most places are landlocked.
]]

&nbsp;

Buyer's ability to move across space is determined by the .emob[transport network]

> Numerous options in .emob[urban areas]

> Limited options in .emob[rural areas]

]]

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# The Four Spatial flows

.pull-left[
.tack[
The .emob[flow of information] from the sellers to the buyers about the .emob[quality] of goods available in the market.
]]

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# Marketspace

.tack.w50[
Market
]

&nbsp;

.tack.w50[
Space
]

&nbsp;

]

.emkb.fs110[Marketspace]<br>
.emob[contiguous space] between all potential buyers and sellers through which .emob[price information], .emob[goods] and .emob[money flow].
]

&nbsp;

.tack[
.emkb.fs110[Marketplace]<br> .emob[location] where the .emob[exchange] of goods and money occurs.
]

]

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# Characteristics of Marketspace

.center.tack.w48[
Contiguity
]

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.center.tack.w48[
non-rival 
]

&nbsp;

.center.tack.w60[
non-excludable
]

]

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# Characteristics of Marketspace

.pull-left[
.tack[ Market is efficient if the
.emob[marketspace] has .emob[commonss] characteristics
]
]

.center.tack.w48[
.fade[Contiguity]
]

&nbsp;

.center.tack.w48[
.fade[Non-rival ]
]

&nbsp;

.center.tack.w60[
.fade[non-excludable]
]

]

---

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# Relationship between markets and commons?

&nbsp;

## Subsitutes

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## Complements

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