Getting horse trading right

Horse trading is an art form. Art has a price. Currently, the trade is taking place behind closed-doors – these parlays in resorts suffer from several problems.

The ‘buyer with a difference’ is out with a shopping bag. It needs eight horses. They would look to have to spend the least to bag the required horses. However, the price for the horses should escalate with each one, as they get closer to the majority. So Horse 112 should be able to command the highest price, and Horse 105 the lowest. Horses 113, 114, 115, etc, who are taken on-board as insurance should command prices lower than Horse 105. Therefore: while each Horse has an incentive to become say Horse 111 or Horse 112, rather than be Horse 105 or 106, they wouldn’t want to risk being Horse 113 either.

However, this is a messy process. All we know is that the base price announced is Rs. 100 crore. Those horses looking to trade their loyalty would be in a stronger position if they knew what every other horse were up to. As long as that isn’t known, the party can, say, hide or misrepresent to each horse, their status in the queue. If the horses negotiate individually, they would have to jostle to position themselves on the scale from 105 to 112. If they bargain in groups with help from small-stable owners, they could set prices for small lots. Of course, there is more than just prices at play here. Pedigree matters. Flexibility will be rewarded.

Don’t forget, the current horse owners will attempt to retain, or buy-back, pushing prices further up.

Kidnapping horses is banned by law. But banning sales hasn’t worked – it has only pushed the market underground. So how can all of this be improved?

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