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Information economics seem to be playing out exactly as expected. The price of a good is reverting to its cost of production--near $0 for copying bytes. You can
by wyc 9y ago
Information economics seem to be playing out exactly as expected. The price of a good is reverting to its cost of production--near $0 for copying bytes. You can't stop the rock.
In Information Rules, Shapiro & Varian argue that if you're selling an information product, all that you can charge for is the value that you add on top of the information, such as convenience, freshness, etc. It's best to assume the information itself is free.
- tzs 9y ago> The price of a good is reverting to its cost of production--near $0 for copying bytes. That needs the word "marginal" inserted just before the word "cost".
- etplayer 9y agoMarginal economics seems to be rather popular, but I'm still a stickler for classical ideas of value personally.
- tptacek 9y agoWell then, the price of a good is nowhere near reverting to its cost of production, which is obviously far higher than the cost of the Nth copy of that good.
- CaptSpify 9y agoCan you explain why?
- wyc 9y agoWhen you're making a new movie, the production of the master copy can cost millions of dollars. Same thing with software products, songs, and digital photos. However, making a digital copy after that is very cheap. Therefore, it's better to say that the marginal production cost moves towards zero instead of the total production cost, which would include the master copy cost.
- wyc 9y agoThanks, and good catch. I agree that high fixed costs underlie the very first production unit, followed by cheap distribution and low marginal costs.
- skybrian 9y agoThis argument proves too much. Music and app stores seem to be doing fine selling files for more than the cost of copying the bytes. Also, consider Bitcoin.
- teddyh 9y agoMost music can be found for free on pirate sites and YouTube (but I repeat myself). The Music and app stores are providing convenience, not the actual bits.
- Asooka 9y agoAnd promising to pay the artist. A lot of people actually want to financially support the creators of things they enjoy.
- teddyh 9y agoThat is actually solved separately with things like Patreon, etc.
- lottin 9y agoPaying the middleman in the hope that they in turn will pay the artist is a little naive though.
- ktta 9y agoI imagine many would also like to show support towards the author of the paper. But the money paid for the paper pretty much only goes to the publisher. Weirdly, sometimes the author has to pay the publisher to get published. And then the publisher again gets money from people buying the paper! All in the name of getting published in a 'respectable' journal.
- davidgerard 9y agoYep. It's trivial to download the preview files on Bandcamp - view source, look for the URLs starting popplers5.bandcamp.com - but nobody does, because you'd have to be a bit of a dick. And Bandcamp takes only 15% at most, the rest is passed straight to the artist/label.
- tomp 9y agoHuh? If you're selling an information product, then you can charge for the information. I.e. if the information you produced/collected is better, better organized or more convenient than what you and I can find searching hours on the internet. That has value, a lot of value, and you can, and should charge for it. The problem with academic publishers is that they don't do any of the above. The information isn't even really theirs! That's why their product is essentially worthless...
- agumonkey 9y agoWere publisher really adding zero value ? honest question. Did they help people finding books, or organized events, helped authors in any albeit indirect way ?
- taneq 9y agoWell, the idea was that they sorted the wheat from the chaff, published only the good stuff, and therefore saved you time. I'm not sure how effective they currently are at providing this service, though.
- whyever 9y agoThey are not providing that service. The reviewers are other scientists working for free. All the publisher is doing is coordinating the work.