Book Review: Preisbildimg auf Markten mit Homogenen Massengutern

• Date: 01 September 1978
• DOI: 10.1177/0003603X7802300313
• Published date: 01 September 1978
• Author: Corwin D. Edwards
• Subject Matter: Book Reviews

Lothar

Ball

and

Susanne Wied-Nebbeling, Preisbildwng

auf

Mii,rkten

mit

Homogenen Massengutern, Tiibingen:

J.

C. B. Mohr

(Paul

Siebeck) (1977), 164 pp., 38 German

marks.

This book is the result of a request by the German Ministry

of Economics

for

astudy casting light upon aneglected as-

pect of the processes of price

determination-how

pricing

takes place in markets characterized by mass production of

homogeneous commodities. So

far

as the law permitted, the

Ministry gave

aid

in developing the book.

Although the original purpose was to derive the book's

conclusions from study of several industries, the facts were

too stnhborn to

permit

this. Initial intentions to cover some

chemical products

and

some intermediate products of alumi-

num were abandoned because the products were not sufficiently

homogeneous. An initial intention to include plate glass was

abandoned because production was concentrated in too few

firms. Inclusion of fertilizer was abandoned because

that

industry

was already being subjected to another investigation.

Thus what

had

started

as research into several industries

turned

into intensive study of one, the cement industry. Of

the book's 159 pages of text, 125 analyze

that

industry in de-

tail

and

draw

conclusions from this analysis. The remaining

pages contain brief sketches of similarities

and

differences

between conditions in cement

and

conditions in chemicals, fer-

tilizer, plate glass

and

aluminum. The book would be more

accurately described

if

it

were called a

study

of price-making

in cement, leading to hypotheses about the price-making sig-

nificance of conditions similar to those in cement so

far

as

such conditions

are

encountered elsewhere.

As a study of the German cement industry, the book is

thorough

and

stimulating.

Its

basic conclusion is

that

homo-

geneity of product alone is insufficient to create the pricing

conditions

that

have characterized cement,

but

that

when such

homogeneity is accompanied by high fixed costs, inelastic de-

mand,

and

oligopoly in supply,

"normal"

price competition

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