Towards a unified theory of market prices: turning to pricing in practice

Abstract

This article proceeds from the question: how do prices in markets work? In socio-economic theories, I find two answers to this question. The structural-coordinative approach explains prices as outcomes—coordinative effects of pricing scripts installed by exogenous, institutionalized social structures. The performative-epistemological approach explains prices as market devices—endogenous performative-epistemological tools of marketization. While not necessarily antithetical, the two theories define market knowledge, pricing and price in distinct ways. Drawing on ethnographic fieldwork from the Swedish meat industry, this article examines the merits of the two aforementioned theories and the prospects for unifying them. The conclusion presents an empirically grounded proposal for such a unification, emphasizing that prices, in practice, simultaneously express embedding social structures and mobilize marketization. A unified theory of market prices allows for identifying and analysing the recursive relation of social structures and performed episteme in pricing; how prices both express and realize market organization.

Prices as Social Facts: A Sociological Approach to Price Setting

“…These approaches pave the way for the categorization of prices and the construction of typologies. So far, few typologies look at pricing processes and, when they do, they focus on specific prices such as "auction prices" [Smith, 1990] or "market prices" [Baath, 2022]. Based on the literature reviewed, we propose a more general typology of price setting.…”

“…Following Baath [2022], we consider that, in order to fully understand prices, it is necessary to study pricing processes. We propose to complement Velthuis's typology by using an analytical perspective.…”