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Between the Buyer and the Seller
"Karthik Shashidhar takes us on a brisk analytical journey that is as informative as it is entertaining. From football transfer markets to fairy tale start-ups gone wrong, this is a revealing work holding important lessons for all who wish to navigate the evolving markets of today's times" - Shashi Tharoor, Politician and Author "Karthik Shashidhar’s interesting and well-written (almost in the style of newspaper columns) collection of stimulating essays is on efficiently functioning markets, or their lack. Excellent to read, irrespective of whether you agree or disagree" - Bibek Debroy, Economist
Why is it difficult to find Feta Cheese in Bangalore, or mango pickles in Barcelona? Why are tourists encouraged to bargain? Why do startup platforms provide heavy incentives to their users? And why is it difficult to find the right date using dating apps? The answer to any of these questions rests with a mysterious entity, who quietly exists between the buyer and the seller. In this absorbing account, quant and management consultant Karthik Shashidhar uses concepts from economics and financial markets to explore this entity's complex behaviour. From medieval bazaars to modern “two-sided marketplaces”, the book explores why markets are structured the way they are, and how they can be designed in order to ease transactions between the buyer and the seller.
ABOUT THE AUTHOR Karthik Shashidhar lives in London, where he works in financial services. Between 2012 and 2017, he was an independent quant, data science and business strategy consultant. Simultaneously, he was Resident Quant at the Takshashila Institution, and an adjunct faculty at IIM Bangalore. He wrote this book while living in Barcelona in 2016. Karthik writes a regular column for Mint where he uses data and quantitative methods to comment on issues of contemporary interest.
Why is it difficult to find Feta Cheese in Bangalore, or mango pickles in Barcelona? Why are tourists encouraged to bargain? Why do startup platforms provide heavy incentives to their users? And why is it difficult to find the right date using dating apps? The answer to any of these questions rests with a mysterious entity, who quietly exists between the buyer and the seller. In this absorbing account, quant and management consultant Karthik Shashidhar uses concepts from economics and financial markets to explore this entity's complex behaviour. From medieval bazaars to modern “two-sided marketplaces”, the book explores why markets are structured the way they are, and how they can be designed in order to ease transactions between the buyer and the seller.
ABOUT THE AUTHOR Karthik Shashidhar lives in London, where he works in financial services. Between 2012 and 2017, he was an independent quant, data science and business strategy consultant. Simultaneously, he was Resident Quant at the Takshashila Institution, and an adjunct faculty at IIM Bangalore. He wrote this book while living in Barcelona in 2016. Karthik writes a regular column for Mint where he uses data and quantitative methods to comment on issues of contemporary interest.
279 pages, Kindle Edition
Published September 6, 2017
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Displaying 1 - 13 of 13 reviews
February 13, 2022
Very good introductory book on various business models, got to know about this book through Podcast. It's a nice read for people starting from zero.
November 29, 2019
The book presents a lot of insights about how markets work. It talks about various topics related to 'markets' - how liquidity matters (with a primer on 2008 crash), whether or not brokers add value etc.
The book being india centric made it even more interesting for me.
The book being india centric made it even more interesting for me.
September 22, 2017
Price needs buyer.
This book has innumerable insights into things that happen all around us. In markets, in stock exchanges, in farms as well as in boardrooms and bedrooms.
It is a very easy read as Karthik uses his own experiences as well as everyday events and situations to explain how economics can be used to understand these things. There are plenty of anecdotes and stories from Istanbul’s Grand bazaar to the APMC market in Bangalore to keep things interesting. Though there is nothing specific to India in this book the author’s natural basis creeps in. Which is an excellent thing.
We need a lot more such accessible books about economics which are set in the Indian context. As is obvious from a lot of examples that have been analyzed in this book, we could use a lot more economic reasoning in our daily interactions with each other and with the government in this country.
Let me dive straight into some of the things I found most interesting..
Incentives matter. A broker gets paid when a deal is struck while a clearing house (or a platform) gets paid when you subscribe to it. Hence they will behave in very different ways. True from marriage brokering to real estate.
Broker is not always bad. They help reduce what is known as ‘congestion’ (unwanted or irrelevant stuff in the market) and save your time. They can also reduce the liquidity gap by acting as a buffer of resources over time. But only when there is enough competition and relative information parity between buyer and seller.
Irrespective of the cuisine you pick, it is inevitable that the total cost of cooking at scale is far lower than the cost of cooking individually.
Take that you people who prefer to eat at home! :)
A city can be uniquely defined by the liquidity of different goods and services there.
One of the most brilliant definitions of a city that I have ever some across. Liquidity. Liquidity. Liquidity. You cannot stress this point enough. Only if there are enough buyers and sellers does it a market make.
The 2008 crash of course. A nice explanation of what lead to the toxic debts that eventually led to the crash.
Traditionally, the luxury goods industry relied on members-only clubs to get rid of excess inventories.
I had no idea about this but made a lot of sense when I read the reasoning around maintaining the brand image while also incentivizing sell.
A way to prevent arms race in High Frequency Trading? By using trading windows as suggested by some Chicago researches.
Bargaining is not always efficient. When you bargain you place a lower value on your time than on your money. Think about it. So don’t waste 10 minutes to get the price down by 10 rupees.
What is Uber playing at? Two-sided platforms have to be very careful when they subsidize both sides. They should do it only till they can achieve the required level of liquidity in the market.
March 1, 2018
Written by Karthik Shashidhar (regular Mint readers may recognise him from his data analysis driven column in the paper), somebody who I know through the Takshashila Institution, the book was an easy pick after I finished reading "Who Gets What and Why" by Alvin Roth on design and structure of markets. Karthik's book is a much easier read for it is written for the layman rather than academics. I was able to finish it in about 4 hours.
The book uses a number of familiar case studies from everyday experience and popular media, especially in the Indian context, to explain why certain markets (both online and offline) are structured the way they are, what makes them work and how they have evolved. The factors that cause certain markets to become more buoyant or collapse, whether by accident or by design, are illustrated very well. There were a number of aha! moments in the book for me. The framework provided by Alvin Roth in his book was very helpful to me for I could use it to arrive at conclusions and deductions even before I reached the parts in the book where Karthik has done so. Indeed, Karthik uses Roth's framework quite liberally himself. An understanding of market design and structure is essential to anyone who's building, running, analysing or consulting for a business for it could very well mean the difference between success and failure at the above tasks.
The book could have done with tighter editing but perhaps it was the writer's desire to make it lucid and readable for a large audience that has led to repetition at places.
The book uses a number of familiar case studies from everyday experience and popular media, especially in the Indian context, to explain why certain markets (both online and offline) are structured the way they are, what makes them work and how they have evolved. The factors that cause certain markets to become more buoyant or collapse, whether by accident or by design, are illustrated very well. There were a number of aha! moments in the book for me. The framework provided by Alvin Roth in his book was very helpful to me for I could use it to arrive at conclusions and deductions even before I reached the parts in the book where Karthik has done so. Indeed, Karthik uses Roth's framework quite liberally himself. An understanding of market design and structure is essential to anyone who's building, running, analysing or consulting for a business for it could very well mean the difference between success and failure at the above tasks.
The book could have done with tighter editing but perhaps it was the writer's desire to make it lucid and readable for a large audience that has led to repetition at places.
December 29, 2017
Karthik Shashidhar makes a strong debut in this book that delightfully captures various analytical essays about various markets, evolving startups, unicorns such as Uber, Ola and taxi aggregators, various pricing strategies such as dynamic pricing, transactions costs and the liquidities in Indian and international markets etc.
This book is easily approachable for anyone who is curious in economics and markets. Computer Science practitioners will also love how game theory and various related theories, anecdotes are applied to functioning of markets. This is a book that I will continue to re-visit often.
This book is easily approachable for anyone who is curious in economics and markets. Computer Science practitioners will also love how game theory and various related theories, anecdotes are applied to functioning of markets. This is a book that I will continue to re-visit often.
November 12, 2017
I usually do not read non-fiction but I totally enjoyed this book. I heard about it on the Seen Unseen podcast and the discussions about the book made me curious enough to get it and read it and once I started reading it, it was simply too interesting to put down. Very insightful and gives an excellent idea about the markets and liquidity. Totally recommend it to anybody who likes to read about economics, behavioural science and financial markets. If you enjoyed reading Freakonomics then you will definitely enjoy reading this book!
October 29, 2020
The author explores different markets, market failures and liquidity issues across various sectors / industries. It has a lot of interesting anecdotes and stories. However, if you are looking for a deep dives, this is not the book for you. This one reads a lot like a collection of slight longer blog posts. (Hat tip to @apoorv3E who said it first on twitter.) However, I do enhoy reading blogposts so I did enjoy this!
October 4, 2017
A really good on book on market design and the dynamics of two sided marketplaces. My only gripe is that it did not cover the different kinds of auction markets in more detail. What I liked about the book is that it has covered contemporary examples quite well, Overall a good coherent read on a interesting topic.
December 17, 2017
This was an interesting read. I enjoyed the parallel storytelling structure—this made a lot of the text more accessible to a first-timer like me. I enjoyed the writing style, but I felt in places that it could've used a good editor.
Really good book, nonetheless. I'll probably read it again some time.
Really good book, nonetheless. I'll probably read it again some time.
October 5, 2017
Brilliant economic insights!!
Freakanomics kind of approach applied to Indian contexts. Book provides marvelous examples from Indian contexts. Though the book is supposed to be on heavy economics, the insights are simple enough for layman to understand..
Freakanomics kind of approach applied to Indian contexts. Book provides marvelous examples from Indian contexts. Though the book is supposed to be on heavy economics, the insights are simple enough for layman to understand..
March 9, 2018
If you have not read books on economics, price discovery, elasticity, demand and supply curves, then this is a good first read. If you have already read some book on these topics, then you may skip this one.
January 4, 2018
It was not very fast paced read. Enjoyable insights, though got boring after the demonitization bit.
May 23, 2020
An interesting book but the insights provided are not totally awe inspiring. Though the part about how the restaurant business should be more mainframe and not aspirational is something i completely agree. The language is very lucid and the author has taken precautions not to over simplify it. All in all it was a good read.
This entire review has been hidden because of spoilers.
Displaying 1 - 13 of 13 reviews