Gift Economies vs. Transactional Economies
Discussion
Gregory Rader on Comparing Comparative Advantage
Gift economies will predominate where:
Participants basic needs have already been met through transactional economy or can be achieved through gift economy
Market participants can build and maintain functional relationships
- Geographically connected - Communication and/or reputation tracking is possible and efficient - Relationships are ongoing - repeated games
Productivity is heterogeneous
- Value of a unit of work varies significantly between people or between distinct efforts from the same person
Products are individually differentiated, unique or personalized - gift like
- Products derive their value from being unique or personalized - Perceived value differs significantly between recipients/consumers - Price Discrimination dramatically increases distributive efficiency*
Value is difficult to judge
- Few identicals or comparables exist - Practical value is not immediately obvious - Supply and demand are difficult to observe, measure, or quantify
Interactions are reciprocal and networked
- Market participants produce and consume similar sorts of value - reciprocation in kind is possible - Production is collaborative or networked - Participants' roles are flexible - creativity is enabled - Participants accept and value personal connections
Participants are intrinsically motivated or enjoy process of production
Transactional economy will predominate where:
Participants are striving to meet basic needs that can only be achieved through transactional economy
Market participants are functionally anonymous
- Distance is a barrier to trust or rapport - Lacking modes of direct communication - One time transactions (no repeat games) - i.e. transactions with outsiders
Productivity is homogeneous
- Most productive effort can be consistently valued and priced in terms of common currency
Production is standardized, lacking differentiation or personalization
- Products derive value from satisfying ubiquitous wants or needs - Perceived value varies relatively little between consumers - Price Discrimination is not critical*
Value is easy to ascertain
- Identicals or comparables exist - Value of product in practice or practical usage is obvious - Supply and demand are observable, measurable, or quantifiable
Interactions are one sided and linear (production/supply chain flows in one consistent direction)
- Production is linear
-- Supply chain proceeds directly from producers through distributors to consumers -- Market participants have fixed roles
- In a given domain one party is always the buyer or seller - Market participants prefer to remain anonymous (efficiency is preferred to intimacy)
Participants lack intrinsic motivation and/or production is a chore "
(http://onthespiral.com/tag/gifteconomy)