Sugarcane Markets

[skthewimp]

Ah, no. Don't get psyched by the title. This is not about agriculture, and will not be cross-posted on the Indian Economy Blog. This is more to do with the festival today. Sankranthi.

The basic activity during the festival is that you visit some N houses and give them a stick of sugarcane each (along with "side dishes" such as bananas, occasionally

Comments

[anonymous]

Dude, you got your analysis alright, but u got something wrong... Its not about ethics or price of sugarcane... Its giving sugarcane to your loved ones that makes you happy... Its called sharing... Its called love and affection... Ofcourse I still totally think you have got this analysis right on!

[skthewimp]

if everyone follows the "sharing" with full "louvvu and affection" and "ethics" then this problem wouldn't be there at all and everyone would end up with good sugarcane

unfortunately that isn't the case so things are the way they are

[anonymous]

Ha Ha
Why does this remind me of 'Golmaal Radhakrishna'?
With regard to earlier conversation(comments) ,isn't interesting to know how different motivations drive similar causes(Sk any economic patterns here?).
Well apparently all religions want people to do things with motivations similar to full 'louvvu and affection' and many research models suggest such economies are more likely to prosper/innovate.

[skthewimp]

it reminds you of that because i've said "louvvu"

[coolshankin]

the whole sharing business is communist in nature :P and in communism there is no incentive to perform better ..... so it fails.

[skthewimp]

strong

[arvindn]

interesting analysis. although it feels more like a "negative externality" to me than a tragedy of the commons.

[skthewimp]

hmmm i think actually if i think about it it's more like markets with asymmetrical info

the reason i thought of tragedy of commons is this. basically you decide that in the thousands of sticks the recipient gets if there is one bad stick he won't really notice, and he won't know who it came from and so you give a bad stick. and everyone does the same. something on those lines.

but yeah i think what you say makes more sesne

Have you factored all the buyers in this analysis?

[ext_79213]

Your post makes it seem like all the sugarcane in the market is for Sankranthi cane gifting ritual only, and nobody ever eats sugarcanes for personal consumption.

I think you got the economic analysis correct on the shared cane part, for which quality-indifference would hold true for buyers. But I think you missed on a major part of buyers, as your analysis would hold good only for two-three days around Sankranthi.

Re: Have you factored all the buyers in this analysis?

[skthewimp]

the reason i'm talking about sugarcane and not about banana (which is also similarly exchanged) is because of the size of the "exchange market" in relation to the entire market

bananas have a large personal consumption (no altruism) market. so they don't exhibit this kind of a behavior.

however, in sugarcane, the market for personal consumption is very small compared to the total size of the market, so can be ignored