Finding Economic Lessons in Fading Era of Card Shows

[fgoodwin]

Finding Economic Lessons in Fading Era of Card Shows

By MARY PILON
Published: April 21, 2012

Can the dying world of baseball card conventions provide a lesson in economics?

The long-dwindling gatherings of card dealers peddling mint-condition Joe DiMaggios and Stan Musials are good examples of what economists call two-sided markets, according to a new working paper from the National Bureau of Economic Research.

[excerpted]

[jefferyepayne]

I've read this article a couple of times and am trying to figure out why this is news. Disintermediation (the cutting out of middlemen in a supply chain) has long been pointed to as a major benefit of e-commerce systems like ebay so no big revelation about economics here. Like a lot of middlemen, card conventions/shows suffer when buyers are able to find and purchase cards from seller without them.

I do plan to track down the actual research study and read it myself as this article is not very well written and I'm not sure how well the reporter even understood the research she was reporting on.

jeff

Originally Posted by fgoodwin

Finding Economic Lessons in Fading Era of Card Shows

By MARY PILON
Published: April 21, 2012

Can the dying world of baseball card conventions provide a lesson in economics?

The long-dwindling gatherings of card dealers peddling mint-condition Joe DiMaggios and Stan Musials are good examples of what economists call two-sided markets, according to a new working paper from the National Bureau of Economic Research.

[excerpted]

[danski496]

Ebay and other giants like walmart chewed up the mom and pop shops, I purchase from both in limited volume. This is one of the reasons the economy is the way it is. Just my two cents. Maybe I'll write a book about it ; )

[fgoodwin]

Originally Posted by jefferyepayne

I do plan to track down the actual research study and read it myself as this article is not very well written and I'm not sure how well the reporter even understood the research she was reporting on.

I tried to get the study but I'm not a participating member of NBER and don't feel like paying $5 for it. Let us know what you think of it.

[frankbmd]

Agree with Jeff. I thought the article was reminiscent of a marginal student trying to write a term paper on a topic she didn't understand after sleeping through class for a semester. I didn't get the point.

Today I would go broke at the gas pump traveling to card shows (conventions) to assemble my 1000 card plus vintage collection that I have purchased online in the last five years.
Twenty year ago going to card shops and conventions (shows) was my only option.

It seems pretty straight forward to me, but then I've never been a fan of the NYT.

[HaloFan]

Generally speaking, I don't believe any stories about our hobby have been written in a positive light in the last 15 years or so at least. There is this perverse idea that sportscard collecting is all about the money and kids not being able to afford packs etc...and they never get into the interesting niches or the positive changes that have gone on about the hobby.

One of the problems about shows is that the cost to do and promote them have gotten extremely high and the take back on dealers has sunk. I think it was Rich Klein that said somewhere that when it costs $10 for parking, and $10 to get into the show, a guy is out $20 before he even walks into the show when in the 80s and 90s the cost was much lower. Promoters have to charge these fees because the spaces to have the show are that high. There is also tax issues and insurance fees(I'm guessing) that were much lower or non existent years ago that are now mandatory. I have never promoted a show so I'm guessing here.

The way the hobby is now, the group that you need to attend shows is where it was 20-25 years ago only the costs of doing the show are not where it was back then. There are new collectors out there, but can't/won't spend $20 to get in a show and will only spend $2-$5 on cards. I'd like to think I have a responsibility to move to the dealer side of the table and promote and educate new collectors but the dynamics of selling cards just have changed. The poor economy doesn't help. These days NM or better cards may sell near top $$ levels, but VG or lower stars I've seen sell for 10% or lower. I'm talking guys like Mantle, Mays, Musial and Ryan whose top values are $350-$100 will move only if they are $40-$9. How can a dealer make money when the market is like that??

Getting back to card shows, unless the media changes its bias of card culture based on kids card flipping, penny packs and making $$$$ as a result we will continue to see stories that slam the hobby as worthless. I'm only 34 so my view collecting as kid was very different and I've got friends who are 10-12 years younger that didn't even see what I experienced collecting. The hobby has changed a great deal, I just don't see anyone reporting on it.

Craig H

[skelly]

I could go off in a million different directions, but one thing that I don't think has been mentioned that has hurt shows is the whole "show" aspect. Let me explain. Back in late 80's, early 90's, you would see the vintage cards at a show and really be impressed. Although 55 Aaron's and 56 Mantles were coming out of basements and attics at a rapid rate, people really thought these cards were somewhat rare. Now with the internet, people realize that they can type in 1968 Bench and there are always a handful to choose from.

-- The sense of urgency isn't there. It used to be that if you didn't buy that nice looking 68 Bench, you might not see another for a couple months. I also think with the auction catalogs, ebay, people no longer get excited to go to shows in order just to "window shop" and look at some of the vintage cards. At least as far as the mainstream post war stuff, people have seen it all. It can no longer be a "show" if there isn't much new and exciting stuff to be seen. Certainly the really large shows and the National are an exception due to the breath and uniqueness of some items.

[jefferyepayne]

Here is a link to the research report for anyone that's interested:

http://people.bu.edu/mrysman/research/PPSCC.pdf

Ironically, disintermediation strikes the National Bureau of Economic Research and they are out the $5 they wanted me to pay them for this report ...

jeff

[RobertGT]

Utterly pointless article and feeble attempt at serious research. The revelations are obvious to anyone who has bought a sports card since 1999.

But the "economists" did come up with this astounding finding:

"The more conventions there are in an area, the lower the admission is for consumers, the economists determined, as competing conventions drive down the ticket price.

[jefferyepayne]

Ok, I've read the research report. The whole purpose of this research is to empirically explore the validity of what is called a two-sided market (i.e. one in which buyers and sellers are charged a fee by an intermediary). The premise of this report is that card shows (pre-internet) provide a great two-sided market to study as the fees associated with card shows are simplistic, making it easy to do data analysis on.

The results of the study validate several aspects of two-sided market theory:

1. As competition increases, prices do not necessarily reduce. For card shows, competition results in decreases on the consumer side but not on the dealer side. In fact, in some cases, dealer prices increased in the face of competition.

2. The side of the market that sees the most price decrease due to competition is the side that typically does not move between competitors as freely. Consumers tend to frequent particular shows they like irrespective of others that pop up while dealers will try to attend as many as they can afford in order to reach new customers.

I guess this is fine theoretical research about two-sided markets but doesn't really give any insights into the card industry at all. Clearly the internet has had a far greater impact on the card industry than any dynamics associated with two-sided markets and this research doesn't discuss / address this dynamic at all.

jeff

[fgoodwin]

Originally Posted by jefferyepayne

Ok, I've read the research report. The whole purpose of this research is to empirically explore the validity of what is called a two-sided market (i.e. one in which buyers and sellers are charged a fee by an intermediary). The premise of this report is that card shows (pre-internet) provide a great two-sided market to study as the fees associated with card shows are simplistic, making it easy to do data analysis on.

The results of the study validate several aspects of two-sided market theory:

1. As competition increases, prices do not necessarily reduce. For card shows, competition results in decreases on the consumer side but not on the dealer side. In fact, in some cases, dealer prices increased in the face of competition.

2. The side of the market that sees the most price decrease due to competition is the side that typically does not move between competitors as freely. Consumers tend to frequent particular shows they like irrespective of others that pop up while dealers will try to attend as many as they can afford in order to reach new customers.

I guess this is fine theoretical research about two-sided markets but doesn't really give any insights into the card industry at all. Clearly the internet has had a far greater impact on the card industry than any dynamics associated with two-sided markets and this research doesn't discuss / address this dynamic at all.

jeff

Jeff, thanx for putting the paper into layman's terms. I looked at the paper but couldn't make any sense of it.