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What is the value of a paperclip?


I was recently listening to an episode of “Ted Radio Hour” and I came across this Ted talk (linked above) about someone who traded a paperclip for a house on Craigslist.

Kyle MacDonald, the mastermind behind this crazy idea, wondered if he could trade a red paperclip for anything–maybe something grand like a house. He posted an ad on Craigslist requesting for a trade and traded the paperclip for a fish pen. He then proceeded to trade the fish pen for a doorknob with a wrinkled face, then the doorknob for camping stove, the stove for an electric generator…the series of trades continued until Kyle was able to trade a role in a Hollywood movie for a house in Kipling, Saskatchewan, achieving his ultimate goal.

Now, the series of trades that Kyle conducted aren’t exactly considered auctions, but the principle behind the trades follow closely to those in an auction. As we went over in class, each person (or bidder) has an intrinsic value in their mind about a certain item and that value is what they are willing to pay to obtain the item. With any auction, the bidder “wins” if they are able to obtain the bidded item for their intrinsic value or lower. In Kyle’s case, in each one of his trades, he was able to trade away the item for another item of a greater value (according to his own intrinsic scale), and the recipients of Kyle’s items successfully gained more value through the trade as well. Kyle phrased this phenomenon as “we’re moving liabilities into assets. we’re creating value, we’re improving each other’s lives, albeit on a small scale”. If we were to look at Kyle’s paperclip experiment as a game, then all the participants were winners; every participant came out of the game better than when they first joined.

From a network standpoint, this experiment can be analyzed through many other different lenses, but even from the surface level, Kyle’s experiment is a reminder that the international network of people is much more intertwined than what we might think. If anything, this experiment is a call for us to act upon our whimsical and seemingly unrealistic thoughts.

I’ll end with a quote from Kyle: “It wasn’t about the paperclip; it’s not about having it or selling it for what it’s worth. If I hadn’t traded away that red paperclip, I would just be a guy sitting there at a desk holding a paperclip in his hands wondering what would happen if I did something with that paperclip.”


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