Pricing in Economics Textbooks

http://www.joelonsoftware.com/articles/CamelsandRubberDuckies.html

In this old article Joel On Software alludes to the demand curve not necessarily sloping down as the price goes up.

Anyway, it's a good taste of the seller's side of bargaining.

I think you're unlikely to do better than ME&S here. 18 pages actually seems quite accessible given the careful treatment Rothbard gives this subject. From personal experience, I remember ME&S as a breath of fresh air concerning bargaining, providing sufficient depth without unneeded complexity.

The Ricardian model of the gains from trade has a hidden problem in that the price at which trade takes place is indeterminate (or has to be assumed to the be pre-trade price in the larger country). The problem is constant returns to scale.

Switching to diminishing returns gets you a determinate price, but at the cost of a more difficult calculation. I did create an example for students here (see the heading "trade with diminishing returns"), but I doubt that it gets the point across to anyone who is new to economics--there is just too much information there.

I prefer to start out my economics courses with a rent-vs.-buy calculation. It does not demonstrate gains from trade, but it is something that makes sense, has obvious practical value, and helps introduced students to interest rates. It also helps suggest how prices might be determined in asset markets.

Menger's Principles of Economics gets it done it 4 short and readable pages. 194-197.

What about Osborne's chapter bargaining?

Prior to working as a bookseller I had several years experience in a large flea market, and learning the process of negotiating prices is quite a workout which can leave you awake at night. But what really stuck out in my mind was a former co-worker from an office, who thought the whole process of negotiating prices was beneath what civil people should be doing and expressed this to her child in no uncertain terms in front of me. One on one buying and selling is not distasteful, the fact that many people do so in informal markets is just one reason why the U.S. is far behind other countries in numbers of self-employment .

I've misplaced my old copy of Alchian's Exchange and Production - would he have a good write up in there? Being a UCLA grad I suspect you think the answer is no, since you didn't mention it already.

You might go old school and try Carl Menger's "Principles of Economics." The last half of the chapter on the theory of exchange goes over a nice example of individuals trading horses and cows and exploiting gains from trade. (ppg 181-190)

Another option is to write out a list of your most important concepts and write a chapter yourself. Pedagogy is a very important skill for an economist to develop, especially since figuring out the most critical ideas to teach helps one organize their thinking.

David Friedman's textbook Price Theory has a rather basic 2 page introduction, Chapter 6 Part 2 Complications of two-person trade. Text is online at www.davidfriedman.com

Actually, Rothbard's discussion in "What Has Government Done to Our Money?" of moving from barter to currency is closely related to what you're looking for and might be useful.