Finding Economic Lessons in Fading Era of Card Shows
LodiBrewFan
Posts: 564 ✭
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.
Card conventions proliferated through the 1980s and 1990s, as did the production of baseball cards. Only a few large shows remain as much of the card-collecting industry has moved online.
The economists who wrote the paper — Ginger Zhe Jin of the University of Maryland and Marc Rysman of Boston University — examined data on card conventions from 1989 to 1997, a period that included more than 50,000 conventions across the country. The researchers hoped to look at the market pre-Internet, minimizing the effect of sites like eBay.
Jin and Rysman determined that conventions were useful for exploring price theory in two-sided markets — those that involve two (or more) groups of actors in which actors both act through an intermediary and participation of each group affects the other group. (Other examples: yellow pages, credit cards, Web sites used to book flights.)
In the case of sports card conventions, there are consumers seeking to buy cards and dealers hoping to sell cards for the best price, with the convention acting as an intermediary.
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. Generally, the larger the convention, the higher the table fee a dealer paid, with costs ranging from $25 a table to thousands of dollars.
“The Internet has killed these shows,” Jin said. “The Internet made it an everyday convention for dealers, and there’s little point in going to a physical convention. The big ones are still out there, but for the small shopping mall conventions with 10 tables, that was it.”
That may make the research feel more like an archeological study than an analysis of current trends. But Jin said their hope was that the research might be used to confirm existing models of two-sided markets for economists.
“These models are much more general and applicable to many two-sided markets beyond sports,” she said.
David Hobson, a baseball card dealer based in Minneapolis, said he recognized that conventions were two-sided markets. But conventions have inefficiencies, he said, like dealers’ lugging tens of thousands or hundreds of thousands of dollars’ worth of cards around the country and being limited to the smaller pool of convention-goers rather than the larger pool of anyone with Internet access.
“Dealers today have to act as their own auction houses,” he said.
While sites like eBay may charge sellers a listing fee, market structure is difficult to define online, the researchers said, thus diminishing it as a pristine example of two-sided markets. Further, the decline of small-scale conventions offer fewer variations in market structure.
Then there is supply and demand, said Nick Redwine, the owner of Nick’s Sports Cards in Dallas. He said he had not been to a card convention in decades and did not sell or purchase cards online. In spite of the rise of Internet sales, he said “these last five years of business have been the best for us.”
He added: “A baseball card is a collectible. Is it subject to supply and demand? Yes.”
Redwine’s theory is that not only has he benefited from being able to scoop up business that used to belong to other, smaller competitors, but he specializes in rare, vintage cards and his customer base is now reaching another generation. More consumers, fewer cards.
“The kids that grew up in our store, well, they’re coming back and bringing their kids into the hobby,” he said.
“People say that cards are dead and I think, no, they’re not,” Redwine said. “They’re alive and well, but the dealers went online and there are fewer conventions.
“Things change. It’s 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.
Card conventions proliferated through the 1980s and 1990s, as did the production of baseball cards. Only a few large shows remain as much of the card-collecting industry has moved online.
The economists who wrote the paper — Ginger Zhe Jin of the University of Maryland and Marc Rysman of Boston University — examined data on card conventions from 1989 to 1997, a period that included more than 50,000 conventions across the country. The researchers hoped to look at the market pre-Internet, minimizing the effect of sites like eBay.
Jin and Rysman determined that conventions were useful for exploring price theory in two-sided markets — those that involve two (or more) groups of actors in which actors both act through an intermediary and participation of each group affects the other group. (Other examples: yellow pages, credit cards, Web sites used to book flights.)
In the case of sports card conventions, there are consumers seeking to buy cards and dealers hoping to sell cards for the best price, with the convention acting as an intermediary.
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. Generally, the larger the convention, the higher the table fee a dealer paid, with costs ranging from $25 a table to thousands of dollars.
“The Internet has killed these shows,” Jin said. “The Internet made it an everyday convention for dealers, and there’s little point in going to a physical convention. The big ones are still out there, but for the small shopping mall conventions with 10 tables, that was it.”
That may make the research feel more like an archeological study than an analysis of current trends. But Jin said their hope was that the research might be used to confirm existing models of two-sided markets for economists.
“These models are much more general and applicable to many two-sided markets beyond sports,” she said.
David Hobson, a baseball card dealer based in Minneapolis, said he recognized that conventions were two-sided markets. But conventions have inefficiencies, he said, like dealers’ lugging tens of thousands or hundreds of thousands of dollars’ worth of cards around the country and being limited to the smaller pool of convention-goers rather than the larger pool of anyone with Internet access.
“Dealers today have to act as their own auction houses,” he said.
While sites like eBay may charge sellers a listing fee, market structure is difficult to define online, the researchers said, thus diminishing it as a pristine example of two-sided markets. Further, the decline of small-scale conventions offer fewer variations in market structure.
Then there is supply and demand, said Nick Redwine, the owner of Nick’s Sports Cards in Dallas. He said he had not been to a card convention in decades and did not sell or purchase cards online. In spite of the rise of Internet sales, he said “these last five years of business have been the best for us.”
He added: “A baseball card is a collectible. Is it subject to supply and demand? Yes.”
Redwine’s theory is that not only has he benefited from being able to scoop up business that used to belong to other, smaller competitors, but he specializes in rare, vintage cards and his customer base is now reaching another generation. More consumers, fewer cards.
“The kids that grew up in our store, well, they’re coming back and bringing their kids into the hobby,” he said.
“People say that cards are dead and I think, no, they’re not,” Redwine said. “They’re alive and well, but the dealers went online and there are fewer conventions.
“Things change. It’s economics.”
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Comments
the socializing part of it was fun, be it meeting other dealers, collectors, or professional athletes, there was something beyond just standing behind a table and peddling.
and, i miss the guy with oversized All-Star notebook, pages spilling out all over the place, but still alphabetical, which made it a pleasure to see Hank Aaron leading the way to a sweet cash and carry transaction.
As mentioned I also miss the socialzation with dealers and just seeing other collectors. Shows were also great for kids. how many young kids right now would get a kick out of sitting at a computer shopping for cards versus going to a show. Not mine anyways. Sadly, I mostly pick up supplies at shows these days.
<< <i>I can see that the authors of this study are trying to show a textbook example of an economic theory but their commentary on card collecting is inaccurate. While card shows certainly don't have the numbers it had 20 years ago, card shows are far from dead in 2012. In Chicago, where I live, there are two or three shows every single weekend. There are also numerous shows a short drive away in Wisconsin, Michigan and Indiana. I've also started traveling to Ohio where there are a tremendous amount of shows. While I love buying and selling cards online, I still enjoy card shows as much today as I did when I first started attending shows in the late 1970s. There is just no substitute for being in a room filled with thousands of cards, holding them, haggling over price, discussing the hobby and sports with like-minded individuals, then going home with a pile of new cards to enjoy. I can guarantee that card shows aren't going away any time soon. >>
The other item I like about shows, is seeing the items I would of never known about based upon searches on the internet. Seeing some of these cards in person (wagner, plank, etc) which just seeing a photo is a different feeling. I get to about big 3/4 shows a year, my dislike of local shows are that they are all newer items and not pre-1980 cards.
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Working on:
Football
1973 Topps PSA 8+ (99.81%)
1976 Topps PSA 9+ (36.36%)
1977 Topps PSA 9+ (100%)
Baseball
1938 Goudey (56.25%)
1951 Topps Redbacks PSA 8 (100%)
1952 Bowman PSA 7+ (63.10%)
1953 Topps PSA 5+ (91.24%)
1973 Topps PSA 8+ (70.76%)
1985 Fleer PSA 10 (54.85%)
it helped if there was beer.
Now if someone can accurately described decreased popularity in collecting cards due to several factors: end of a trend/craze, baseball's diminished status after 1994, unreal product proliferation, the reality of cards as an minimal (at best) "investment" for the masses, increased cost of packs...
Combine that with the above information...
You would accurately encapsulate the why and how of the differences in the hobby between 1992 and 2012.
This would be a real step up from the reporting done by CBS last month on the "death" of the hobby.
The hobby today is alive and well, but certainly does not include the number of collectors it did 20 years ago.
Primarily because the general public eventually realized that buying tons of cardboard from their local KMart was not necessarily a gold mine (see also Beanie Babies, Cabbage Patch for other crazes that were hugely popular where the public was cashing in and creating a short term pricing hysteria [and for that matter see real estate market 2003-2005])
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