150 - the right size for larger groups?

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At tickerTXT we were have been discussing since the beginning how many members a market in rural areas need and what the maximum number is. We don't have an answer and there probably won't be definitive numbers.

A market needs a critical mass to really be attractive to participants. That attraction is through network effects. The number of participants is relative to the "tangible" activity on a regular basis. People want to see things happening and expect deals to be closed regularly, that someone is potentially there to conclude a good deal.  You want to see many deals per day, but not too many, then sometime participants will quickly feel overwhelmed.

The other factor for a thriving market is security / safety and trust. Using the mobile phone SMS to engage in market conversations and to conclude deals I need to trust my counterpart. Trust does not mean I have to like the other person. It also doesn't necessarily imply that the other person doesn't cheat. But if I know that my deal partner is likely to cheat, I can hedge and protect myself. Trust works to the 2nd degree connection. You may trust someone you don't know through a person close to you.

Therefore we estimated that the largest working market communities would likely count 500 to 1500 members. Any bigger and there would be too much trade activity and too little trust because of the 2ng degree of trust limit.

Maybe a market is comparable to a village community. Then a market would count around 150 people. In order to thrive, they would need to be more active than a larger community with less individual trade activity.

Or a tickerTXT market could include several village-like communities within a market? Maybe not, because that would look to economists like cartels. Cartels are just like larger organised groups within a community and will likely fight for power. Markets work best if participants can do their business without political restrictions, when rules are fair and the deals transparent.


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