The War on Prices, How Popular Misconceptions About Inflation, Prices, and Value Create Bad Policy is a compilation of essays edited by Ryan A. Bourne. The twenty-four entries are organized into three sections: Inflation, Prices, and Price Controls and Value. Bourne steers the way with introductory comments.
What I like best about the book is the variety of stories in which price plays a leading role. You start to notice that the numerical representation tallied at the time of transaction in the exchange of a good or service has its own flare—a price personality.
George Mason economist Alex Tabarrok is known for describing price as ‘a signal wrapped up in an incentive.’
Here, we’re looking at the action price- a very popular one indeed. It is the price that will cause the actors in the market to take charge and make a deal. Action price is the number most serious sellers want to post to attract buyers and move some merchandise.
But there are many others. Take Chameleon Price. In the West Needs Water story, we hear about the city of LA going out into the country in search of water rights. The early Californian farmers had secured water rights, which were now more valuable in the quickly growing urban area. When the Water Board went to the rural farmers with money in hand, they wanted to purchase the land at a price derived from its agricultural value. Soon, sellers realized that they were not selling farmland; they were selling water rights and demanded a price linked to the increased property values on the receiving end of the water.
At first glance, the object in the transaction takes on one appearance only to change to another hue at a new price.
More price talk to come.
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