The Fiction of the Quoted Price

Abstract

Legislation to the end of controlling price competition has been directed both to the wholesale price and the retail price. In each instance the purpose has been to mitigate the ferocity of competition by narrowing the range of prices at which goods will sell. The basic assumption of the Robinson-Patman Act is that the deprivation of large concessions to big buyers will tend to an equalization of prices between them and independents. The fair trade acts of states have sought to achieve that equalization directly with respect to branded goods; manufacturers are empowered to fix the prices at which their goods are sold by the jobber to the retailer and by the retailer to the consumer. In large part the effectiveness of such legislation depends upon the significance of the pecuniary quotation in the sale. This in turn prompts an inquiry into the nature of that economic fiction-the quoted price. The quoted price wears the air of pecuniary exactitude. It is the sum paid for a haircut, a radio, a ham sandwich or a suit of clothes. The seller offers his ware at a price commensurate with the recovery of his costs and a profit or at a price necessary to meet competition. The prospective purchaser has the privilege of indulgence or restraint; he can buy or do without. But if he yields to the temptation, his acquisition can be made only at the specific price quoted by the seller. Thus, in theory, the charge for the commodity is clearly and pointedly stated; and the exchange, if it occurs, is consummated at the quoted price. A variety of instrumentalities are used to make prices public. The price tag on a hat in a store window or the pasteboard carrying the price of a sbelf of canned pineapple is simple and direct. The daily newspaper prints the current quotation of wheat on the exchange or the common stock of a railroad. Special sales of goods are brought to the attention of the consumer through free circulars, newspaper announcements, and invitations to preferred customers. The mail order house publishes at regular intervals catalogs which are both an advertisement of its wares and a vehicle for publicizing price. The radio administers homeopathic doses of ediacation by special pleaders of industry. A telephone call will elicit information