Pricing has evolved from the ancient art of haggling to the application of scientific methods to the micromarket. In a sense we are going back to the unique knowledge of individual customers and products that existed in the old bazaars and town squares – but we’re armed with powerful technological tools of the 21st century. The world of Pricing 4.0 is upon us.
But let’s start at the beginning. In the beginning there was the trade, and the trade saved humanity. Seriously.
Homo neanderthalensis – Neanderthal man – had been occupying the planet for about 200,000 years when our ancestral gene pool, Homo sapiens, showed up on the scene (both species evolved from a common ancestor Homo habilis that had begun to make and use basic tools about 2.5 Ma (million years ago), but their evolutionary paths diverged some 600,000 Ma). Despite what would seem to be a solid first-mover advantage thriving in the harsh Ice Age climate of Europe and Western Asia, Neanderthal man vanished from the face of the earth sometime around 30,000 years ago while the progeny of H. sapiens went on to give the world the Hanging Gardens of Babylon, Magna Carta and How I Met Your Mother. In 2005 academicians Richard Horan, Erwin Bulte and Jason Shogren presented a well-researched argument for why this happened: trade. According to their paper “How Trade Saved Humanity from Biological Extinction: An Economic Theory of Neanderthal Extinction” it appears that our ancestors had particularly honed skills in organizing specialized activities such as tool-making, and trading their goods between different social organizations. As the Ice Age melted and populations grew and migrated, the skills of free trade became an evolutionary competitive edge. Continue reading