Search Costs, Markets, and Discoveries

Reflections on a vintage postcard.

As soon as I arrived home from Dartmouth, my mom excitedly showed me the above postcard. The photo shows the storefront of my great-grandfather’s business—a small flooring and carpentry company—in the late ‘50s or ‘60s. (Perhaps a car aficionado could determine a more precise range based on the old-school automobiles in the photo.) My mom relayed to me that she was unsure how exactly she came upon the postcard online but that, once she did, she was able to find it up for auction on eBay.

I imagine that some especially sophisticated algorithm in some search enginge or social media app is responsible for my mom’s stumbling upon it. If so, there is a strong case to be made that targeted advertising is not so devilish as it’s often made out to be. After all, without it, my family would have been utterly ignorant of the postcard’s existence and it would have remained inefficiently allocated to someone who was selling it for about $5. The photographic evidence of our Swedish ancestor’s entrepreneurial success in the United States is worth considerably more to my family than $5.

Suffice it to say, my mom won the bid and we are now the proud owners of a piece of family (and economic!) history. We have markets and merchants, both of which are often inaccurately yet vociferously maligned, to thank for reducing search costs, facilitating this discovery, and easily transfering property rights.

Another day, another win for markets.