Sunday, May 14, 2006

Gains From Trade

Awhile back, I linked to an article on this Canadian dude who, through a series of swaps, traded a red paper clip for a year of housing in Phoenix. At the time, I wondered how this was possible. Given that all this guy did was do the searching and trading, I was surprised that it was possible to make such a large return from providing this service. It suggests that people are really averse to selling their stuff and shopping for stuff (which I guess I shouldn't find surprising given my own aversion to these two things), and people would be very happy if they could simultaneously turn stuff they don't want directly into stuff that they do want. Tyler Cowen points to a website, Swaptree, which tries to do exactly that. Pretty cool stuff.

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