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The paper published below was prepared by Taylor Ostrander for Frank Knight’s course, Economic Theory, Economics 301, during the Fall 1933 quarter.

In this chapter, we follow the growth of the pricing discipline, especially through the ideas of one of the earliest of pricing's pioneers: Dan Nimer. The Nimer influence on pricing has been foundational, sewing seeds for the growth and development of various pricing fields and subfields – pricing objectives and pricing strategy, value-based pricing, costing and pricing, financial analysis of pricing, and price sensitivity. The ideas we present in this chapter originated largely with Nimer, many in his own voice. We interweave them with the ideas of other contributors to the pricing discipline to show the development of the field. Dan taught many foundational pricing concepts; they are captured in seminars and articles kept through the years. Founding pioneer to pricing, Nimer's influence will remain long into the new century as pricing enters a new phase as a strategic capability of the firm.

Three structural properties of accounting commonly embedded in Generally Accepted Accounting Principles are examined in a two-period principal-agent model. These structural properties are conservation of income, consistency, and selective recognition. The article illustrates that these properties are essential for the use of accounting information in management performance evaluation: they are necessary conditions for an accounting mechanism to be more efficient than a direct revelation mechanism. The trade-off between the gain from the information revelation and the incentive cost of discretion determines whether contracting is more efficient under the accounting mechanism or under the direct revelation mechanism.