Review of Power Pricing (Hardcover)

Why does there exist such a variety of pricing schemes for different products and why do we see different prices for the same product, depending on who buys it when, where, and how? This is a branch of microeconomics called price discrimination. Price discrimination questions are among the most directly observable ones for students, particulary those who are unlikley to study more economics or business. I therefore focus on these questions in teaching managerial economics in an organizational management graduate program.

Dolan's and Simon's book is therefore of some interest to me. These two management consultants have written an extremely practical and non-academic book which explores the actual practice of business pricing with greater sophistication than found in most standard applied micreconomics texts or many business marketing texts. The main markets for this book, I suspect, are students, having graduated but still disatisifed with the overly theoretical approach in their microeconomics classes, and business managers, especially in medium to large companies, for whom pricing is a very dynamic and strategic issue.

I doubt this book is used as a main teaching text, nor would I recommend it. Its basic concepts are hardly novel and are found in any microeconomics or marketing text.The presentation of the basic concept of price elasticity is somewhat long and tedious (it is usually done in less than a page in a standard microeconomics text). However, the application of this concept -and illustrations of how businesses can use it practically - makes for a very rich discussion.

What is useful in their book is the variety of examples of actual business settings where practical pricing decisions have to be made which can apply several different concepts. How globalization affects pricing decisions is given considerable attention in this book. I did not find the final section on implementation of priing strategy in organizations as insightful as the middle chapter which is more analytical.

For teaching and learning purposes, this could be a useful back-up resource, if used judiciously with a more standard text.



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