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Maybe, but their goal and rationale seem fairly reasonable, even if there are counter-arguments. If being rationally optimal were easy there would be far fewer

Maybe, but their goal and rationale seem fairly reasonable, even if there are counter-arguments. If being rationally optimal were easy there would be far fewer divergent opinions in the world. The headline of the article is that they have lost revenue because of their business decisions. I just wanted to emphasize that there's more to business than maximizing sales revenue of your product: The way you sell your product shapes the market downstream, and it is reasonable for publishers to think that Amazon's market share grabs were anti-competitive and that a lack of competition is worse for them. Demand curves are not the only thing that go into pricing decisions.

Turing_Machine 11y ago
If they think that keeping their prices high is going to reduce competition, they are in for a rude, rude awakening.
- danharaj 11y ago
  There is an intermediate market between publishers and their ultimate consumers. They were selling their products at the same price as they are now to Amazon before, it's just that Amazon was allowed to take a loss on the sales to build marketshare which possibly prevented other players from entering the distribution market. Are you unconvinced that allowing Amazon to absorb losses in order to dominate their distribution market is possibly bad for them? Or are you satisfied with treating them with contempt because it's so "obvious" to you that they're being boneheaded?
  - Turing_Machine 11y ago
    "it's just that Amazon was allowed to take a loss on the sales" That is absolutely not true. The marginal cost of delivering an ebook is so close to zero that it's hardly worth calculating. Amazon (or anyone else) can easily deliver ebooks for $0.99 and still make a profit on every single sale.
    - danharaj 11y ago
      They bought the ebooks for 15 dollars and sold them for 10 dollars.
      - Turing_Machine 11y ago
        No, they did not. Perhaps a occasional loss-leader was marked down that much, but overall Amazon has always sold ebooks for more than the cost of acquisition.

Turing_Machine 11y ago

If they think that keeping their prices high is going to reduce competition, they are in for a rude, rude awakening.

danharaj 11y ago
There is an intermediate market between publishers and their ultimate consumers. They were selling their products at the same price as they are now to Amazon before, it's just that Amazon was allowed to take a loss on the sales to build marketshare which possibly prevented other players from entering the distribution market. Are you unconvinced that allowing Amazon to absorb losses in order to dominate their distribution market is possibly bad for them? Or are you satisfied with treating them with contempt because it's so "obvious" to you that they're being boneheaded?
- Turing_Machine 11y ago
  "it's just that Amazon was allowed to take a loss on the sales" That is absolutely not true. The marginal cost of delivering an ebook is so close to zero that it's hardly worth calculating. Amazon (or anyone else) can easily deliver ebooks for $0.99 and still make a profit on every single sale.
  - danharaj 11y ago
    They bought the ebooks for 15 dollars and sold them for 10 dollars.
    - Turing_Machine 11y ago
      No, they did not. Perhaps a occasional loss-leader was marked down that much, but overall Amazon has always sold ebooks for more than the cost of acquisition.