Markets in Something

by Mr Juggles

It’s frequently said that you can’t get something for nothing. This is true. But what is the price of something? Difficult to know. This has been a market that lacked liquidity and price discovery.

Luckily, the Something Store has started making a market in somethings. You can buy as many as you like for $10 per something. I suspect they are capturing a large producer surplus here — somethings may well be worth less than $10 — but I nonetheless admire their willingness to make a market in something.

Recommendation: We’re still working on how to make a market in anything which seems to be a dangerous proposition. Something can be more valuable than anything, but in a discretionary context, anything is likely to be a lot more valuable than something. Nothing can actually be more valuable than anything or something. And then you bring everything into the equation and it’s worth either zero, infinity or negative infinity, and there is clearly a lot of science that needs to be done.

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Comments

  1. May 29th, 2008 | 4:21 pm

    Wow.

    I’ve got nothing…

  2. my2cents
    May 29th, 2008 | 5:57 pm

    This is all very distressing- the following items are NOT SOMETHING-
    http://www.somethingstore.com/somethingnot.html
    basically anything you would actually want is not included!!!

    Adult goods and services
    Alcohol
    Body parts
    Drugs and drug paraphernalia
    Drug test circumvention aids
    Endangered or regulated species
    Regulated financial products or services
    Gaming/gambling
    Miracle cures
    Protected cultural items
    Precious materials
    Prescription drugs or pharmacies
    Tobacco and cigarettes
    Weapons
    Wholesale currencymbling

  3. To The Hilt
    May 30th, 2008 | 8:58 am

    Anal_yst, you should make a market in your nothing.

    I’ll bid negative infinity…

  4. HAM'05
    May 30th, 2008 | 2:22 pm

    *head explodes*

  5. raw
    May 30th, 2008 | 2:54 pm

    Nothing from nothing leaves nothing, had to do something, motherfucker punched you in the mouth

  6. HF
    May 31st, 2008 | 12:22 pm

    According to my model, if you divide something by everybody the result is zero … this is the prove that you should keep your something for you… unless you have everything than if you divide it by everyone you get something for everybody…
    Here is the mathematical proof:
    Something=10$
    Everybody= 1.3 B people
    Than 10/1.3B is aprox = 0….

    If you have everything than everything= infinity
    than infinity/everyone = something>10$ to everybody

  7. Theoretical
    May 31st, 2008 | 8:14 pm

    HF, you forgot to multiply by pi

    Mmm, pi.

  8. HF
    June 1st, 2008 | 5:37 am

    Since pi=3.14…. I will instead multiply by adjusted pi or pi(e)

  9. June 1st, 2008 | 7:54 pm

    @ Hilt

    The problem with market-making in Nothing, is that spreads for nothing, unsurprisingly, are essentially non-existent. Until we figure out a new profit mechanism, we will continue to do, you guessed it, nothing.

  10. Notquiteanonymous
    June 2nd, 2008 | 7:44 am

    The fact that you can’t get something for nothing probably points to Something > Nothing.

    But perhaps a whole lot of nothings can get you something, or Nothing x N >= Something, where N = a whole lot. Create a tradeable instrument based on N, and you can corner the market on both Nothings (which derives its value from N) AND Somethings.

    Arbitrage theory dictates that Everything = {All Somethings} and hence you can actually deduce the value of Everything through the market price of N (which of course you would set).

  11. american bandersnatch
    June 2nd, 2008 | 11:26 am

    Perhaps you can’t make a market in nothing – but a show about nothing could really be something.

  12. mrsiv
    June 2nd, 2008 | 11:26 am

    I postulate that
    something = E(price_of_underlying) + novelty_spread – lemon_premium

    price_of_underlying is the randomly distributed market value of the unknown item;
    novelty_spread is the subjective price of the “surprise”;
    lemon_premium is the cost of the information asymmetry (see Akerlof, 1970).

    The problem, I suspect is that for most people, the lemon premium is greater than the novelty. Is novelty a commodity in its own right? If I have lots already, it might depress the price I’m willing to pay for it at the margin. Does it leak away over time? I’m pretty sure there are no storage costs, unless people have to put up with a smug sort of aura 🙂

    more research needed I think.

  13. June 2nd, 2008 | 11:45 am

    its because of conversations like this that we get all the ladies…

  14. FX_rules
    June 3rd, 2008 | 12:17 pm

    I’m pretty sure Seinfeld already came up with the idea about making a TV show about nothing.

  15. anonymous
    June 3rd, 2008 | 5:32 pm

    A good way to monetize nothing would be to evaluate the total profits derived from the syndication of the show about nothing (sienfeld) and divide by the number of re-runs that have been aired (infinity). As you can see this approaches… nothing. It is clear by this proof that if the values of something, anything, and everything are all greater than zero, nothing is actually worth less than evrything, anything and something. Therefore nothing = nothing. That’s called math. just put the Nobel on my chair when they award it… thx

  16. Notquiteanonymous
    June 5th, 2008 | 5:41 am

    “Approaching nothing” is not the same as zero. Nice “proof” mathlete.

  17. Mathlete
    June 5th, 2008 | 5:44 am

    “Approaching nothing” is not the same as nothing. THAT is called math.

  18. my2cents
    June 5th, 2008 | 6:11 pm

    Not all somethings are worth the same (paper hat vs whistle).
    Therefore we should group a whole bunch of somethings- tranche them and sell off the worthless somethings.
    Continue a number of times and suddenly we have made something out of nothing.

    mmmmm… i think someone may have beat me to this idea..