Marbles and economics

Back when I was a wee bitty boy I used to play marbles at school. I noticed pretty quickly that the rarest marbles were also worth the most in terms of other marbles.

Of course, like in the real world** scarcity isn't the only thing that determined value. Size did too - probably related to the cost of the marble in the shop, and how beautiful the marble was. (Just as in the real world some things have value because for whatever evolutionary reason, humans are attracted to spangly things.)

I realised one day I could take advantage of the scarcity influence on price and managed to procure from a friend at another school a certain number of a type of marble that had not yet made it to my school***.

I decided that one dark speckled little marble was worth as much as a cyclops (that is what we called the very large marbles, if my memory serves me correctly). From then it was a matter of getting the price socially accepted. It didn't go down very well, but I talked about how rare the marble was and deliberately rationed supply. Some people seemed to accept it and I made as much as I could (as it were) from those people.

I then slowly started to introduce more and more marbles into the 'market', and 'sold' these marbles for less and less. It was both (almost) perfect price discrimination (amongst those who had a different opinion of the 'value'****) and (almost) perfect control of supply which impacted on the price*****.

In the end, the marbles worked their way into the general mix of marbles and the market determined their long-run value. But for that short while I had a monopoly, I made a killing.

I was about 10 years old at the time. A natural economist :)



* This blog entry is inspired by a recent facebook comment by my sister which reminded me of this story.

** And who says my school days were not the real world?

*** I went to a village school as did my friend and with the distance of our schools at a full 4 miles and intra-village communication being discouraged, new technologies took time to travel :)

**** Limited by the non-divisibility of marbles.

*****I could control only the sales of new marbles and not the 'second-hand' market.