Interesting. Ultimately, the traditional forms of price discovery inherent in a market are a function of supply and demand; they don't really carry over into th

Interesting. Ultimately, the traditional forms of price discovery inherent in a market are a function of supply and demand; they don't really carry over into the digital world where supply is effectively infinite and demand is elastic. Rather, what we face is a change from commodities (wheat, fish, etc) to distinct products within a category. When I go searching for an app for a purpose, I have to choose: * Do I want the app that costs $10, which seems expensive for a phone app, but also seems like it's likely to be of the highest quality by virtue of the price? * Do I want the app that's priced at $2.99, which is more than 99 cents but still not $10? It might be better than the 99 cent app, or it might be a 99 cent app that the creator got wise about and charges more for now... * Do I want the 99 cent app, knowing it's the least someone can charge? Does this imply a lack of quality? It feels a little bit better than the next category... * How about the free app with ads and in-app purchases? I see that and worry that the app will annoy me and not be useful. * How about the entirely free app? I find myself experimenting with the latter, most of the time. One technique that works really well on me is to have two separate apps, one free with no ads/in-app purchases but limited in functionality with multiple indications of what I could do in the paid app, and then a paid app for $5 or so. If I like the basic version and the quality seems right, upgrading is an easy decision. Perhaps app stores could incorporate feedback functionality so someone can press a button indicating how they feel about value for money - "I'd buy this but it's too expensive", or a "Wow, what a deal" button.