The value of supporting Gus ( @ideasoutloud ) on Twitter: A econ-nerd blog post on transaction costsPosted: April 7, 2011
Transaction costs are small costs that come from using a pricing-mechanism or in other ways send a signal in a group of trading individuals. As such money need not be involved. In fact money often aren’t directly. There is a cost to using Twitter for instance; even if we do not pay per tweet, it still takes time to do it (and we use electricity, wear and tear on the computer, data subscripting costs etc.) and that time could be spent chopping wood, shooing horses or whatever way you normally make your living. However we choose to tweet because the small cost that the transaction cost us pales in insignificance to the potential impact it can cause – or so we hope. In fact measuring the actual cost of transaction costs, like those incurred while tweeting, is likely more costing than the transaction. But let’s try for a moment.
So if we ignore all other cost than time spent, and I assume it takes 2 min to tweet a statement (to think, decide, formulate and tweet) and if it is read by say 200 followers, that is 0.6 seconds per receiver. And maybe some of these receivers RT so that it is spread even more and the price of the transaction goes down further. I might also build followers, getting the price further down over time. But it never goes way.
Imagine if you tweet 15 times a day. That is about 10 whole days a year (I assume you sleep 6 hours) spent on nothing but tweeting. And I am still not taking other costs than time into consideration. Wow. But it is still not much compared to printing a flyer and start handing it out at the local grocery… Not that long ago people did this. Some still do – They are quite often promoting policies that will raise taxes or products that are bad for your health.
So tweets is all about price signals because you are suffering a cost when you tweet and that cost becomes an inclination of what value tweeting your particular message has to you. You could have done something else with your time. While at the same time you probably would not do 15 flyers a day, right?
The reason for this adventure in the exciting world of the transaction costs of tweeting is that I believe that if enough people send price signals, the world will change. If nobody picks up those pretty flyers and subsequently does not buy the product, the company behind the flyers will go bust. If enough people tweet about something somebody out there might alter their behavior or decision. Maybe not this time, but over time at least.
So yesterday I tweeted my support to local Australian entrepreneur Gus Murrey who is being kicked out of Denmark despite having received an education and being an active and social-conscious citizen with high entrepreneurial ambitions. I know Gus from my old alma mater and he is a stand up great guy and if it was a place to crash or a nice meal he needed I would always offer help. So of cause I will also tweet his message of political injustice. It was not free, but it was an expense well spent. Happily a lot of other people did this too. Pooled together the joint time investment of people is now up to 28 hours (at 21:30 last night) or with an average hourly pay of 250 DKK it comes to about 7000 DKK value (or with a 60% tax rate; 4200 lost revenue for the tax man) in tweets alone (add media coverage and Facebook comments to get the whole campaign cost if you like). It is too early to tell if the supplier of laws (parliament) have seen the price signal, but it surely is out there.
Thank you for reading this and for supporting Gus and have a nice day!
Read more on Gus’ plight here.