Remember Kyle MacDonald, the guy who made fourteen trades to move up from a red paper clip to a house? From The National Post, here is my piece on how he did it, what he really did, and what he is doing today. Kyle worked at these trades for a full year, so here is the opening puzzle:
Judging from the local real estate market, Kyle’s house is worth about
$50,000. Why didn’t Kyle just go out and buy a house? Surely such a
smart and able person could have spent the year working at a good job.
My favorite part of the story is when Kyle trades a day with Alice Cooper for a motorized snow globe with multi-colored lights.
I first heard about this story from Tyler’s post in April. It’s a very interesting example of economic actors behving irrationally.
Thought this might be of interest to some. Check out Google Trends:
http://www.google.com/trends?q=red+paper+clip%2C+Kyle+Macdonald&ctab=0&geo=all&date=2006
Notice the peaks right after Tyler’s first post, then in July, when the house was primisded to Kyle Macdonald. I really wish that Google trends had some way of calibrating the trends, i.e. so that one could get a sense of the real, not just relative, volume of searches.
Considering he clearly had a great deal of fun doing it and is now writing a book, is he really irrational? I’d argue he must of had some idea of these additional benefits beyond the real estate because he had no idea where the eventual house would have been located like, God forbid, Yahk.
Read the article Andrei.
The story vividly illustrates how value is in the eyes of the beholder, not the “objective” labor content of the object itself.
Among 15 traders, only Kyle is dilligent enough to discover the price. Another 14 traders look fully trust the guy, and sell their souls.
However,if anyone could be more active enough, sell it online at ebay, or have enough patience to delve out the final value, the thing may be different.
The power to defend the value lies in everyone’s hand. Whether you exercise it or not will make big difference. After all, for this type of one to one trade, not everyone is on the same boat.
This is for charity. So if for personal reasons, a said by moralhubby, everything should be reversed, and the trading process is totally efficient.
What is a better one? One shot trading: the clip for th e house. Of course, it would never happen.
There’s a marketing meme there which Grant McCracken, Seth Godin, Roy H. Williams and others have been writing about. The guy was selling an adventure story, and *a chance to have a public role* in it at some but not great cost (players traded in what they had that was disposable). It’s a brilliant model, becoming less brilliant as it replicates.
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