Thursday, April 23, 2009

Does eBay reduce looting? (UPDATED)

Derek Fincham points to an article in Archaeology magazine arguing that, contrary to what we might have expected, the rise of eBay has actually reduced antiquities looting. Economist Tyler Cowen summarizes: "Supply is so elastic, and so many fakes are made, that looting is less worthwhile than it used to be." Larry Rothfield says: "On a quick first read, it seems logically persuasive, with some caveats. One is that if eBay is expanding the market then even if fakes bring the prices down relative to what a market with lower level of supply would charge, the increase in the number of potential buyers might drive the price back up, leaving the incentive to loot about what it was before."

UPDATE: Freakonomist Steven Levitt comments.