Thursday, September 12, 2013

Bartering in Fresno

Local store needs a bathroom. Local handyman can do it without money, just exchange for store goods. Store owner gets bathroom at home depot prices, but gets an economy of scale gain because he has a reliable customer for the duration. The handyman works part time and does his consumer shopping simultaneously with work.

Its an agglomeration effect, both parties are closely packed and can find each other without wage bargaining. And the deal lowers monetary costs down the line, via the magic of mutual entropy. So they gain more than i, the proportional number of monetary events, but -iLog(i), which are the accumulative gains from skipping money, thus freeing up transaction space, which is limited.

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