This morning, I read this post in Mark Buchanan's Blog.
IMO, the question to be answered first: market clearance pricing (from price to cost) or fair prices (from cost to price)? Provided market clearance pricing works well, market prices are fair prices. If I believe the price is fair, I am not interested in the price structure at all.
I rather fear that market clearance pricing in some sectors can lead to a ruinous down spiral, when combined with such kind of transparency leading to selective awareness, or when it drives a race to a monopoly situation.
So, I don't agree with the rationale of the original blog, but I (also) find transparency is not always the solution. It depends on sectors, business models, ...
Market clearance pricing is impossible when selling a chemical reactor, or a portfolio with (complex) financial instruments. When fair prices need to take price-at-quality, price-at-risk, ... in account transparency really matters.
Transparency in quant finance has many aspects: what models are used, what calibration schemes, what price adjustments are made related to which risk spectra ... what management fees, ...?
To improve customer relations pricing technology providers shall deliver know-how packages and not only software at first hand and sellers shall transfer conclusions of this information to buyers and add how they have influenced their pricing in principle and what impact they might have ...
UnRisk is highly committed to deliver know-how packages.
And if prospective customers wish, we explain, why our license-prices are so unprecedented low. Not surprisingly, most just take them without asking ;)
