alt Hacker NewsMatt Levine wrote about this in July
> There’s a big market (egg producers selling eggs to supermarkets etc.), and there’s a small market (egg producers selling extra eggs to each other on an electronic exchange). The price in the small market determines the price in the big market. Participants in the small market are also participants in the big market. You can spend a little money in the small market to move the price, which can make you a lot of money in the big market.
“Egg LIBOR was also manipulated” (Paywalled) https://www.bloomberg.com/opinion/newsletters/2026-07-01/egg...
There is a good story in here about how economics as a profession is intellectually bankrupt. But at the same time, there is also a story about how the only hard data the economics profession can actually offer is actual transactions completed by disinterested, non-colluding, and independent individuals. Supply and demand curves only make sense when there is a genuine conflict between the supply and demand sides. LIBOR-like arrangements, where it's suppliers selling to each other, do not form a valid market because the demand side is also the supply side.
The magic Latin words to ward away CAC farmers[0] are "straight tender-to-tender transaction", aka "you're just moving money around, it's not a real transaction". I am wondering if we need a similar kind of mind-numbing rhetoric to refer to exchanges that are not valid markets: i.e. do not have opposing supply and demand. These exchanges nominally serve some kind of purpose - they balance supply across suppliers - but they should not be allowed to participate in price discovery as they are not a market.
[0] "Customer acquisition costs" refer to any money paid by a business to attract new customers only. A lot of business risk management is put into making sure your customer acquisition costs are not functionally a straight-up discount or giveaway.