Social Embeddedness in the Iranian Bazar: Case Study of Handmade Carpets bazar

Although the price is a determinant element of the exchange market and is primarily considered as an economic variable, the basic idea of the present paper is that in the carpet bazar in Iran it is not merely a result of supply and demand, but also it is influenced by the structure of relationships among the actors. in other words, types of social embeddedness are significant in this regards and prices in this market are shaped by the structure of social relations between buyers and the sellers.With the aim of identifying the social mechanisms of pricing using a qualitative approach and an ethnomethodology method, we studied 35 participants from carpet markets in Mashhad, Tehran, Qom and Isfahan cities. They were from different parts of the bazar inclusing merchants, wholesalers, retailers, commissioners, and intermediaries.The analysis of the interviews showed that the formation of prices in the carpet bazar is influenced by the exposure of sellers to strangers and acquaintances, and leads to the emergence of two main types of arm’s-length price and embedded price. In arm’s-length prices, a seller deals with strangers, which includes three types of cash, long-term and profitable, and in the embedded price of which the transactions with acquaintances are carried out, three types of prices include the obligatory, painful price and mediatory are identifiable. The results clearly show that prices in the carpet market are not based solely on the economic calculations of the actors, but these prices are embedded in social structures, and many social mechanisms are involving in the process of pricing carpets.The results clearly show that prices in the carpet market are not based solely on the economic calculations of the actors, but these prices are embedded in social structures, and many social mechanisms are involving in the process of pricing carpets.