The Future of Price is a themed series of articles authored by Chris Yapp, Michael Mainelli and guest contributors on new directions and challenges in the theory and practice of Price. The series builds on the book The Price of Fish authored by Michael Mainelli and Ian Harris. In the fast paced and globalising world, current theories and practice on pricing are increasingly inadequate for us to know that our financial system is working, the key question Long Finance seeks to address.
The series will explore Price in relation to rising global inequality, volatility, scarce natural resources, the economics of abundance and the digital economy. Since the crash of 2007-2008 the wealthiest have increased their wealth significantly faster than the mass of the population. To what extent have the policy tools such as QE contributed to that disparity? The pricing of positional goods creates new challenges to the supply-demand curve models. In The Price of Fish, the authors pointed out gaps, holes and clouds in these curves. Now we would like to go further and look at new potentialities such as orthogonal supply-demand models. Can both go up, or both go down? The price of oil and many other commodities have shown greater volatility than can easily be justified by changes in demand. To what extent do we still believe in 'price equilibrium' post 2007-2008? Even if we cling to notions of equilibria can we understand the difference between stable and unstable equilibria in current notions of price? Pricing for sustainability of diminishing resources, especially when sourced from unstable regions and countries could create shocks to the system comparable to the oil shocks of the early 70s. At the same time, especially in the digital economy, the economics of abundance and price setting around notions of Free and Freemium create interesting challenges, especially on valuation of digital stocks using Free/freemium models in a B2C environment. Finally, the development of reverse auctions and tournaments offer new models for price setting which we would like to explore.
Other topics will no doubt arise, as the authors develop the individual arguments. Let us know if you think that any areas for debate and development have been missed.
All articles are available on Long Finance's blog the Pamphleteers, as follows: