# I. Introduction arket is a process where buyer and seller interact to each other and maximize their utility as well as profit by exchanging goods and services (Samuelson and Stephen, 2011). Moreover, perfect knowledge about the product ensures the benefit of both economic agents and generate efficient outcome in the market (Hossain, 2014). In contrast, any kind of anomalies in the specification of the product, may fail the market by creating the inefficient outcomes. Furthermore, by nature, a producer is always tries to maximize their profit (Mankiw, 2014). A producer usually achieves his goal by manipulating information under imperfectly competitive market such as monopoly, oligopoly and monopolistic market except perfectly competitive market. Such kind of information manipulation creates the market failure by harming the consumer. # S.no. Gharar Related Terminologies 1. Two in one sale 2. Sales by touch 3. Persuasive advertisement 4. Bulk discount 5. Conditional sales 6. Sales by lottery 7. Sales without touched 8. Sales of unspecified products in a box # M On the other hand, in Islam, any kind of transaction including buying and selling is considered as a blessings, if both parties show their kindness to each other (Al-Bukhari, 3:293). Any kind of information manipulation, non-specification of the product and uncertainty in a transaction is called Gharar that is strictly prohibited in Islam. This paper is an initiative to detect the presence of Gharar in the buying and selling Mechanism under different kinds of the Market structure such as Perfect competitive and imperfect competitive market. This paper includes the most common practices of buying and selling methods from the contemporary world. # II. Objective of the Study The main objective of this paper is to identify the presence of Gharar in the buying and selling Mechanism under the different kinds of the Market structure such as Perfect competitive and imperfect competitive market # III. Methodology This is a conceptual paper. This paper is prepared by using the secondary information and theoretical background is designed by reviewing the literature from different books, articles and websites. However, this paper consists of eight sections. First, second, third and fourth sections discuss the Introduction, Objective, Methodology and Literature Review respectively. Section fifth includes the discussion on the the Concept of Gharar and Shariah Rulings while section six exposes the Presence of Gharar in the different kinds of Markets. Besides, Gharar in the Promotional Activities was discussed in the section seven. Finally, section eight presents the Conclusion and recommendations. IV. Literature Review V. An Overview of the Concept of Gharar and Shariah Rulings Gharar ????(? ???? ) is an Arabic word that is originated from garrun ???(? ???? ? ). The literal meaning is; hazard, trouble, uncertainty, excessive risk, peril, mislead, swindle; seduce, ambiguity, aleatory, etc. (al-maany, 2018). Terminologically, it can be defined as the sales of unknown, unspecified, non-existed goods. Further more, it can be defines as the trade of an objects whose existence or features are uncertain and the perilous nature of the object makes the deal akin to wagering or gambling. Also, in encompasses the cheating, game of chance through random events, and imperfect information in the dealing contract or uses imprecise language Al-Zuhayli, 1997). Moreover, cheating (tadlis) and (ghubn) is considered as Gharar in the Encyclopedia of Islamic Jurisprudence (Razi, 1995). Besides, Gharar includes the inadequate information, trickery, excessive risk and uncertainty in the sales of an object or in the contract (El-Gamal, 2006, 58-60). For example, sales of unborn cow, sales of unknown goods in the container, Sales of fish in the pond to be caught, sales of goods without measuring, selling the birds in the sky, unborn calf etc. # Causes of Emerging the Gharar: i Asymmetric information: Asymmetric information arises when in an economic transaction, one economic agent in the market has better information and he can manipulate it. Moreover, it can be defined as the information that is imperfect or partially correct or completely wrong information. Moreover, it is quite impossible to determine whether the provided information is correct or not (Black, 1997), ii Un-specification of the products: a product is said to be unspecified if its characteristics is not clearly disclosed. Such as not exposing the information regarding useful as well as harmful side of the products, iii Uncertainty: it can be defined as the doubtful or distrustful consequences of an event, transaction, etc. (Bishop, 2004). Such as, selling of an unknown product, selling a precious product within a box but without disclosing the nature of precious things. # Shariah rulings on Gharar: In Islamic economics and finance, Gharar al kasir is permanently prohibited in all kinds of financial and nonfinancial transactions (El-Gamal, 2006, 58-60). # VI. The Presence of Gharar in the # Different Kinds of Markets As mentioned in the section-5 that, the Gharar arises due to the Asymmetric information, nonspecification of the product and Uncertainty. These three anomalies can be found in any events where information failure occurred. Moreover, the information failure is highly related with market controlling power of a firm. Market power refers to the degree of control that a single firm or a small number of firms have over the price and production decisions in an industry (Samuelson & Nordhaus, 2010) Gharar is fundamentally prohibited in the Islamic economics and finance. Several researches have been done on the Gharar issue. . Nehad and khanfar (2016) analyzes the concept of Gharar according to the teaching of Quran. Sultan (2016) reviews the Rib?, Gharar & Maysir in Classical Shari'ah and shows its implications in the contemporary World. Haron (2015) scrutinizes the issue of Gharar in the embedded options in Malaysian perspective. Uddin (2015) discusses the principles of Islamic finance regarding Riba, Gharar and Maysir. Cizakca (2010) exposes the issue of Gharar and sukuk regarding the domestic borrowing. El-Gamal (2006) discusses the features and Prohibition of Gharar. However, the earlier researchers discusses the features of Gharar, Gharar in the financial transactions, etc. But this paper raises the issue if Gharar in the buying and selling mechanism under the different kinds of market such as perfectly competitive market, monopoly, oligopoly and monopolistic market, that was totally untouched in the earlier researches. Moreover, Gharar can be classified into two types. Gharar al kasir and Gharar al kalil. Gharar al kalil means nominal or trivial risk that can be lessened easily. Such as business risk, risk in the sales of new products, etc. In contrast, Gharar al kasir refers to the excessive risk or uncertainty that cannot be mitigated easily (Khan, 1990). By considering the market power, different firm introduces the product to the customer by manipulating information. Usually, a product is introduced to its customer by the promotional activities such as advertising, describing the features of the product on its body, booklet, brochure, bill board, etc. Moreover, since revenue maximization depends on the sales maximization, a producer always tries to maximize sales by expanding the promotional functions under the marketing department of the firm. The promotional activities can be defined as the tools or mechanism employed by sellers to influence or pursue the customers to purchase the products or services. However, it further strengthens the stand of the company in the market (marketing School, 2018). According to the Promotional Products Association, 76% of the recipients of the promotional materials remember the products and the company. Moreover, it induces the customers to buy the products and services. Furthermore, advertising is one of the powerful promotional activities in the world. The table - Also, Gharar practices in the buying and selling process under the different kinds of markets through promotional activities. In the perfect competitive market, a large number of buyers and sellers exchange the identical products. It is assumed that perfect information regarding products is available in this market. So, it is difficult to find the presence of Ghararin this market. Monopoly has unparalleled and sole market power because of unique product and single producer in the market. It can manipulate the information regarding products details or characteristics. So, the presence of Gharar is extremely higher in both pure or natural and artificial monopoly. Because, the information provided by the monopolist is only the sources of knowledge that can be gained about the products. Though oligopoly market is better than monopoly for the consumers, But due to the cartel and collusion, the producer of this market provide little perfect information but mostly provide asymmetric information in the forms of differentiated products. Thus, the producer practices Gharar in the oligopoly. Monopolistic market is operated by the large number of buyers and sellers. By nature, the product is close substitute and information is more available in the market compared to monopoly and oligopoly. But due to the severe competition, the promotional activities and asymmetric information is also higher in this market. Thus, this market practices Gharar. Table-4 illustrates the level of Gharar in the different kinds of the Market. The producer practices the several types of promotional tools to maximize the profit in the market. This section identifies the Gharar through table-5 on the many promotional tools those are highly practices in the market. # List of Terminologies that Generate Gharar in the Market # Serial No. Gharar Related Terminologies # Two in one sale It is difficult to realize that, how do they maintain it? , Doubtful about exact quality and quantity, volatile the market 2. Sales by touch and pebble Uncertain events, always one party gainer and another party is looser 3. # Persuasive advertisement Inducing customer to buy the products, actual information is absent, cheating with the customer 4. # Bulk discount It is difficult to realize that, how do they maintain it? , Suspicious about the accurate quality and quantity, 5. Conditional sales It may induce the customer to buy unnecessary products 6. Sales by lottery Uncertainty, always one party gainer and another party is looser 7. Sales without touch Customer is in dark about the products. 8. Sales of unspecified products in a box Customer is in dark about the products. # 9. Buy-one-get-one-free It is difficult to understand that, how do they maintain it? , distrustful about exact quality and quantity, volatile the market 10. Selling the unknown products Uncertainty It can be said that, Gharar is highly present in the promotional activities. Moreover, it creates doubtless that, whether the producers provide the exact quality and quantity of the products or not? Moreover, sometimes, it is argued that, the producer writes the higher price on the product, then offer discount on the price. But it is itself a Gharar or ambiguousness about the determination of the price. Because, price is a representation of the cost of a product, and company's profit. So such type of practices is considered as Gharar is Islam. # VIII. Conclusion and Recommendations Finally, it can be said that, Gharar in a transaction deprives the customer in getting the actual products or services while it make the producer as deceiver, and thereby generates the market failure. This paper discloses the presence of Gharar in the buying and selling methods under the different kinds of the market. Furthermore, this paper identifies the Gharar in the promotional activities those are practices by the producer in the market. Finally, this paper recommends the following steps to avoid Gharar from any kind of financial and non-financial transaction: # Level of # Gharar Presence of Gaharar ? The promotional activities should be designed in a way so that, it discloses the perfect information (including positive and negative sides) about the products. Moreover, the exaggerating and concealing the information must be avoided. 1![Figure 1:](image-2.png "Figure- 1") ![Identifying the Presence of Gharar in Buying and Selling Mechanism Under Different Kinds of the Market Structure](image-3.png "") 1Source: compiled by the author (In billion USD)Region201020172018*2020*Asia Pacific97.54147.95157.77178.75Central and Eastern Europe8.2911.9612.6214.03Western Europe83.3399.27102.97110.12Middle East and Africa7.569.8710.5912.56North America146.3201.6215.28234.44Latin America15.9535.5440.4452.48 (In million USD)CountryAdvertisement ExpenditureSaudi Arabia312 (2015)United Arab Emirates531 (2015)Qatar144 (2015)Pakistan485 (2016)Indonesia2700(2017)Malaysia771 (2017)Source: Istizada (2016), Shadman (2016),Statista (2018) 23Source: Statista (2018), *Projected value 45Source: compiled by the author * Islamic Foundation Bangladesh Al-Bukhari Dhaka * Translation and Meaning of in Almaany English Arabic Dictionary Almaany 2018. 2018 21 * DrAl-Zuhayli Wahbah Financial Transactions in Islamic Jurisprudence : Revised Edition, Gharar Damascus Syria Syria 1997 5 * MBishop the Economist and Profile Books Ltd London 2004 * JBlack A dictionary of economics UK Oxford University Press 1997 * Domestic borrowing without the rate of interest: gharar and the origins of sukuk MuratCizakca 2010 MPRA Paper No. 23205 * Islamic Finance: Law, Economics, and Practice, Chapter MahmoudAEl-Gamal Empirical evidence from Malaysia Cambridge, UK Cambridge University Press 2006. 2015 3 special issue * Economics of Information and Advertising: A Comparative Analysis in View of Conventional and Islamic Economics BasharatHossain Journal of Economics and Development Studies 2 2 2014 * Economic Development and Islamic Finance ZIqbal AMirakhor Islamic Economic Studies 22 1 2014 * Middle East Ad Spend Trends Istizada 2016. 2018 14 * Islamic Economics and Finance: A Glossary MuhammadKhan Akram 1990 Routledge New York 2 nd edition * Principles of Microeconomics, London: South-Western College Pub 14 NMankiw Promotional marketing 2014. 2018 * Encyclopedia of Islamic Jurisprudence MuhammadRazi 1995 Anmol Publications Gharar, Kuwait Awqaf Ministry * Pakistan's Advertising Market Now Exceeds Rs 65 Billion, retrieved 14November AdilShadman 2016. 2018 * PASamuelson WDNordhaus Managerial economics WFSamuelson GMStephen New York; USA John Wiley & Sons, Inc. 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