Eugen von Böhm-Bawerk's Theory of the Determination of Price by "Marginal Pairs"

There are, however, two points in Böhm-Bawerk's doctrine to which reference is frequently made, and which may therefore be briefly noted here. One is his theory that price is determined by what he calls the "marginal pairs"; the other is represented by his views on interest, a subject which he describes as the" heavy part" of his leading work.

The theory of the determination of price by the so-called "marginal pairs" is to be found in the concluding portions of Böhm-Bawerk's discussion of "price," in which up to a point he shrouds obvious truth behind considerable complexity of statement. In the case of isolated exchange the price will be "determined somewhere between the subjective valuation of the commodity by the buyer as upper limit, and the subjective valuation by the seller as lower limit." Putting it in everyday language, in the isolated exchange the buyer will not pay more than he thinks the thing is worth, nor will the seller sell for less than he, on his side, thinks it is worth, and the actual price will fall between these two limits.

--Alexander Gray, The Development of Economic Doctrine: An Introductory Survey (1931; repr., London: Longmans, Green and Co., 1956), 357.