[MUSIC] How do these marketplaces work in terms of exchanges? Well, there are a number of things about exchanges, there are fluid transactions, there is a constant demand for customization and buyers and sellers are quite responsive as well. Here is an example of constant customization. Here is this woman who runs an enterprise and she points out that if somebody asks for a different price, she can say that the item or the product can be different but there's no difference in the price. Why is that? We can't encourage this, others may follow it. They may go and announce to the others that she got the money back. So what is it that she's trying to say? What she's saying is that, you have to be careful about customizing the price for each and every person. Everybody's going to ask you for a special deal and a special product and so on. If you do give them a special deal, it's good to have a reason for it. Maybe it's somebody who's extremely poor or who's elderly, or who bought a lot of volume and so on. But otherwise, if you don't have a reason for providing a special deal, everybody's going to come and ask for a special deal. So in particular person's case, she also sells an installment. And once in a while, somebody would take possession and not pay her some of the installments. She goes to their house and says you must pay they say I won't pay. You must pay, I won't pay. Whether they pay or not she cannot just say, well, never mind coz everybody else will start doing the same thing. And so she needs to really make sure an idea to some general principles in spite of the tremendous pressure to customise. At times she has to customise as well, and this is what we mean by constant customisation. In this particular case of the person who makes pickle, whom we met before, a number of stores come to her and say, you're giving us very little pickle. I know you are packing in these particular quantities, but the people in our neighborhood are construction workers. They only eat once a day. Give us more pickle. So she looks at them and she says, well, you know what I'll try to figure something out for you, all right? And she packs a little bit more pickle every time she supplies to them. Now, the word can get out, but she has to customize a little bit so that they can survive as well and they can have a good product. Transactions are very fluid. To give you an example, here's this quote that says it's the same price. I would have given them a bit more quantity, that is why I quoted a slightly higher price. You can try this out where you go and bargain heavily and try to buy a pound of grapes or a kilogram of grapes. Sometimes, when you weigh it elsewhere, you may not get what you bargained for, literally. So you may not get your pound of grapes. And then if you go back and ask the shopkeeper. And say, you know what? You didn't give me £1, you gave me less than £1. The shopkeeper may say. Well, that's the weighing you'll get for the price that you bargained. You bargained a very good price, so I weighed it a little differently. So transactions are very fluid, as well. And in this one on one environment buyers and sellers are responsive. So it's not a buyer to a large organization kind of relationships. So here Sarah RUe says if they prefer a particular brand I buy and keep it in stock I would arrange it immediately. I will notice it in the morning. I will rush immediately and make arrangements to have the parcel ready within the evening. So that is buyer seller responsiveness happening as well. That doesn't mean there isn't exploitation there's a lot of exploitation. Sometimes there's just one store in a remote village and whatever the storekeeper says goes. But there is also some responsiveness because if you want to engage a small group of customers whom you see every day, you have to be responsive as well. In terms of the relational environment there are two things to keep in mind. The relationships tend to be enduring on a one on one level and that is what we call interactional empathy. Here's an example of enduring relationships. This particular customer says we will not change the shop. We will buy in a single shop. The things in the shop will be good. We will boldly go and ask as these things are not good. For me, he will give the best goods after weighing. I would say I am buying it from you continuously, how can you give me this? So the way a poor customer multiplies her value through these small purchases is by buying from the same store. As a result, she may get credit, she may get special consideration, and it helps her small seller as well because that seller knows that there's going to be definite business from this particular customer. So that's what we mean by enduring relationships. Now that doesn't mean that there are enduring relationships in every setting. If I'm a small flower seller and I go to a large wholesale market which deals with big shops, they may not give me the time of day. And so what we mean is in the one-on-one interactional setting within a neighborhood or between small sellers and small buyers, there is an emphasis on enduring relationships. Interactional empathy is illustrated by this particular philosopher who says, business it not that important but first, the human being is very important. Now what do we mean by this? Well, first of all, this is a very, very harsh environment. We are not trying to paint a rosy picture. We are not trying to romanticize about poverty. What we are saying is that the economic and the human get blurred. It's really about human being to human being. So in other words, very often we hear this argument. You have to make a living, I have to make a living. And that's often used in order to try to strike a bargain. If I have a coconut shop near the temple and you start one right next to me, I'll start a fight with you. But if you start the shop 50 feet away, I'll say, well, you have to make a living as well. So there are these norms, and very often, I am not engaging in the marketplace for some abstract principles of competition. I don't understand those abstract principles. Those abstract principles are a luxury to me. I'm engaged in the marketplace to survive. So I don't know necessarily the difference between the economic and the human, those two get blurred as well. And that's what we're trying to say by using the term interactional empathy. And, finally, all of this is happening in the larger context of pervasive interdependence and pervasive orality. In other words oral communications, people talking to each other. And so that's the larger context in which all of the this is playing in terms of the marketplace. Now having talked to you in lessons two and three about the how people think and cope and how they engage in marketplaces. It's interesting to do a simple experiment by comparing customer skills in India versus the United States. In the United States, there is quite a bit of low literacy and poverty, but obviously, the poverty is not extreme as what you'll see in India and in countries in Africa and so on. Now, what we find, when we compare across the two context is that in India it's a one-on-one marketplace where people learn to negotiate, they learn to count because they are buying products, and they even have a word for it, which is multi arithmetic. They learn how to count verbally, and they themselves are vendors as well. And finally, they have very severe income constraint. So if they don't make the right decision, they won't get the next meal. In comparison to what we find in the US, people deal with large stores, with technology that adds for them. And there's a lot of symbolic information on packages that assumes a certain level of literacy. So ironically what we find is that for that second graded educated person in India versus the United States, the person in India may be more functionally literate as it relates to the marketplace, simply because of the one on one inter actual marketplace that they can use as a stepping stone to learn. On the other hand, in the US because of these large stores, and the technology, and the information assumes a certain level of literacy. People have a very difficult time improving their skills in the marketplace. And so if you're low literate, you can get quite isolated as well. Now obviously I'm making a very sweeping generalization. It's based on our experience, I am speculating. And there are differences between urban US and rural US, as well as urban you know India and rural India and so on. But we do find this quite ironic that you can be more functionally literate in the marketplace when you can rely on others and have a very rich social network. So you are resource poor but you may be quite rich in terms of your social relationships and your social networks and that helps you to develop your skills.
