Bellerbys Economics - Mr Stephenson

Monday, January 01, 2007

Kyle MacDonald

Kyle MacDonald is a very remarkable young man from Montreal. He succeeded in trading-up from one red paperclip to a house within a year - by simply asking people to give him something a little bit better than the object he currently had.

You can read his story here:

http://abcnews.go.com/Technology/wireStory?id=1849375

For those of us interested in Behavioural Economics, this is a fascinating story - an example of altruism. Why on Earth would you willingly give to someone you don't know something of more value than that you receive in exchange? Of course, it must depend on whether the exchange is merely about the object itself or whether there are other factors related to the exchange (such as publicity, excitement, rooting for the underdog and so on) that add value to the object being received.

Kyle also has his own blog which can be found here:

http://oneredpaperclip.blogspot.com/

So here's the plan: I have a packet of drawing pins. When you get back from the holidays, I will give each of you a drawing pin and you can spend the next three months trading-up on ebay. At the end of the three months, you can all give me everything you've gained from the exercise in exchange for the drawing pin I loaned you (well, okay, I'll let you keep 10% - that's fair). The one who gives me the most wins a signed copy of all my lecture noted on Business Ethics - it's got to be a good deal, right?

Okay, so let's get started...... I have a drawing pin.... what will you give me in exchange?

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