Just Price Theory: A Reassessment

Joaquin Alonso Reyes Barros (Universidad Finis Terrae, Chile / Yale University) and Matias Petersen (Universidad de los Andes, Chile) 

University Place 6.213

In our experience as market agents, we encounter many situations in which the price of a certain good seems intuitively wrong, either because it is exorbitant, a ‘rip off’, ‘too much’, or, at the other extreme, because it is ‘a bargain’ or ‘too little’. Whether it is a professional extracting enormous profits for a job he would be willing to do for less, a seller charging more for a good because she knows how intensely the buyer wants it, a buyer taking advantage of the ignorance of the seller to buy cheap a costly item, it seems to be the case that the price paid for some goods does not match the price they ought to possess, i.e., their just price.

These moral intuitions have their legal counterpart in the form of institutions, rules, and practices dealing with unequal exchange. Civil law remedies against laesio enormis,  price unconscionability in the Common Law, prohibitions on price gouging, among others, are examples of institutions shaped by a concern for the fact that certain goods are being sold for more or less than they ought to be.

The aim of this workshop is to explore the analytical and normative implications of the concept of the just price. Potential topics include, but are not limited to, the following:

• Can prices be unjust? What arguments can be put forward for or against price normativity?
• Some scholars have argued that the concept of the just price is linked to some version of the labour theory of value, while others reject this idea and endorse marginalism as the correct theory of value. Is the labour-theory/marginalism debate of any relevance to the normative justification of prices?
• What makes prices just? Can efficiency serve as a justification for prices? What is the role of consent and/or autonomy in price justification? What form of justice (distributive justice, corrective justice, commutative justice, etc.) is relevant for price justification? What is the role of virtue in price justification? Can these plural values be integrated into a single normative framework?
• Is equality between the parties relevant for assessing justice in pricing? Background conditions of exchange—such as inequality of wealth—can have a bear on each party’s reservation prices—i.e., on the lower price the seller is willing to receive, and the higher price the buyer is willing to offer. Can two parties with unequal wealth, or unequal in other respects, arrive at a just price? What is the relationship between equality and just prices? Can prices be just under unjust institutional arrangements?
• What is the relationship between market prices, legal prices, and just prices?
• What is the relationship between just prices and exploitation?