Nov. 12, 2006 – Sunnyvale, CA – Nov 8, 2006
It is easy to think that barter is irrational. The main argument would be that it is rare to find a match (someone who has the item you need AND who is interested in your item). So, why are there still many people bartering? Are they all irrational people? This article may give you some clues.
Barter can save you some money in the short run. First, sometimes it can get rid of any transactional cost incurred when an item is sold. The best example in this case is car trading. If you buy a car from an individual, you need to pay government tax. If you exchange car with another barterer, you can save the tax, which is usually not a trivial amount. Second, when the items / services in question do not have a liquid secondary market it is not a bad idea to barter. For example, if I were a programmer, I can use my spare time to build a website for someone and then get an XBOX 360 or a few sessions of pampering massage experience. On the other hand, it is not easy to “sell” my spare time especially for a small project like this.
Barter can save you great money in the long run. Barter helps establish a life long great habit – always think about what you don’t need before you get new things. This could save you a lot of money in the long run. When you look around your storage room or your garage and check your credit card bill about what you’ve bought lately, you know what I mean.
Barter can lower transactional risk. It lowers your risk by ensuring there will be a buyer for your old item with an acceptable price before you buy the new item since it bundles both transactions. In addition, since both you and the other party are playing the roles of “buyer” and “seller”, it is logical that in most cases the bargain power will be more equally distributed. Furthermore, the fact that you interact with one party instead of two parties will lower the risk of not able to collect money from buyer AND get product from seller…
Last but not least, it is just more fun to barter. You learn to be creative and you get surprises from time to time. Once I was offering my SUV and someone offered me several acres of land!
You can check the site http://www.woonba.com , one of the largest barter sties in the nation.
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