I created an open source barter facilitator application and I am wondering if it is the future of commerce
TehPers @ TehPers @beehaw.org Posts 0Comments 668Joined 2 yr. ago
TehPers @ TehPers @beehaw.org
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How do you calculate this?
As demand increases, the value increases, but at some point when demand exceeds supply (which is common), the opposite happens: the magnitude of the value starts to decrease (though that value is now negative).
For example, two sellers sell a product, and four people want it. Let maximum value be
v_m
. Value is calculated to bev_m / (2 - 4)
=-v_m / 2
. If two more people want it suddenly (so 6 now), it becomesv_m / (2 - 6)
=-v_m / 4
, which has a lower magnitude despite the higher demand and static supply. This is contrary to how supply and demand actually work, where value generally increases as demand increases (if supply remains static).Maybe value means something differently to me than it does to you though. Ideally supply would always equal demand (which makes your denominator 0, breaking the equation entirely since that would be undefined), but that would be really difficult to control.