Lessons in Economics from the Beijing Silk Market (Andrew)

As most readers are aware, after 5 years and as many degree changes I proudly graduated with an economics degree this spring. Unfortunately, it turns out one need only spend a couple of afternoons and several hundred RMB at the Beijing Silk Market to get a good grounding in economics. Hear a just a few of the lessons I learned:

Information asymmetries

When one party has information that the other side needs in a negotiation you have a situation with 'information asymmetry'. At the silk market the savvy buyer needs a fertile imagination to fully appreciate the implications of this fact. Our suits, for example, were almost certainly made in a stuffed animal factory, which we ascertained from the purple and pink fluff in the pockets. I think the factory might be better suited (no pun intended), to stuffed animal making.

Opportunity cost

There are plenty of deals to be had the silk market. Coach bags go 3 for 100RMB (16ish dollars) before you even get inside and Gore-Tex jackets go for 100. Provided that you're interested in something that you can, at very least, convince a complete stranger at a reasonable distance is real, however, you have more of a challenge on your hands. Silk market employees are genuinely willing to battle you all day over the last 10 RMB, in part because they love it, in part because they know the gwylo in their shop is just itching to wrap things up and grab a bite over at 'california beef noodle king USA'. That said, where else can you buy bulk mao statues delivery ready? Christmas gifts for the whole family. Your call.

The 'infant industry' argument

Most commonly one hears about 'infant industries' in the context of international trade. At the silk market, however, the infant is no metaphor. Cameron and I were quite literally handed a small child while we were trying on our suits to distract from the fact that they are probably made from polyester and definitely ill fitting. Cameron's, for example, flies out a little bit at the back. What are you going to do though? Make a child cry? Well played 'Jelly' (our sales lady).

You may be thinking that all these suit examples indicate that we're bitter over our purchases. Not so. We're actually fairly pleased. As suckers go we paid only 600 RMB for each suit, making the guy on the Harvard Rowing team we met 3x the sucker we are. More importantly, the suits can still be put to good use. Cameron plans to use his suits, (note the plural), for working out and going for long runs, and polyester is also the perfect material for a makeshift train pillow. If anyone is interested our suit bags include the store's hotmail, msn and mobile phone contact information. Be sure to drop our names if you get 'Jelly' on the line.