Price Insurance Theory and Bazaar Hedging

Bazaars are important institutions in most oriental countries. Their impacts on life for people are immeasurably extensive and significant. In this paper we link hedging and bazaar activity and explain risk management as an alternative insurance device. We make several key observations as our foundation for bazaar trading in particular ownership and dynamics of hedging. We are interested in popular practices and the most profitable enterprises over time. We discuss habits, implicit rules, disguises, disinformation, privileges and local monopolies. By dividing hedging into intended and unintended we discuss the significance of risk and uncertainty. Thus the economics of bazaar hedging is elaborated as an insurance against bazaar uncertainties in an oriental bazaar.

Keywords:

Hedging , price insurance theory , risk management , bazaar strategies , Implicit rules