3 ms·

You see, the problem is that you are being reasonable. When browsing through consumer goods, people in general often do not reason out the value of the good.

You see, the problem is that you are being reasonable. When browsing through consumer goods, people in general often do not reason out the value of the good. They feel it out. One of the major feelings that people have in this situation is justice. "Bits costs less than paper. Therefore bit-books should cost less than paper-books because otherwise they're ripping me off!" It's not reasonable or universal, but it is a big issue in pricing.

nodata 16y ago
I think you're undervaluing the value other people put in feeling and owning a physical book.
- corysama 16y ago
  Paper has a lot of advantages that I know and love. But, what I'm addressing is a narrow issue I see repeated in lots of areas beyond books. That is that the perceived cost of production has a big influence on the emotional reaction to the price of the good even though it has no tangible effect on the utility of that good. This has a basis in the fact that high-cost goods do require high prices in order to have margins and that competition does push margins closer to costs. But, most people learn about these effects in the checkout line rather than econ classes. From those experiences, the explanation a lot of people have come up with is "If its cheaper to make, charging as much or more for it is mean."
jseliger 16y ago
The term for this is "anchoring," and some of the most interesting work on it I've read is in Dan Ariely's book _Predictably Irrational_. He shows that a) no one actually knows how much they should pay for anything until b) they get some kind of reference for it, which becomes an anchor. He tells an entertaining story about running an experiment in some of his classes: he asks one group of classes how much they would pay to hear him read poetry and asks another how much they would pay to not hear him read poetry. Ariely notes that reading poetry is probably, how shall we say, not among his greatest strengths. The classes primed to pay pay; the ones primed not to, don't. His experiments do, BTW, get more sophisticated than that, but I'm not at home right now. People have "anchor" prices for books based on hardcover and softcover. Many don't realize that physical printing and distribution costs something like 10 – 15% of a book, and eBooks are not 0% by comparison. So you get lots of stuff like the OP.
- mthoms 16y ago
  Apple exploits this very effectively. Related HN thread is here: http://news.ycombinator.com/item?id=1244967 http://news.ycombinator.com/item?id=1244967
wmf 16y ago
Bits costs less than paper. Yes, that's why the ebook is $14 and the paper version is $16. Expecting ebooks to be radically cheaper is where people are going wrong.

nodata 16y ago

I think you're undervaluing the value other people put in feeling and owning a physical book.

corysama 16y ago
Paper has a lot of advantages that I know and love. But, what I'm addressing is a narrow issue I see repeated in lots of areas beyond books. That is that the perceived cost of production has a big influence on the emotional reaction to the price of the good even though it has no tangible effect on the utility of that good. This has a basis in the fact that high-cost goods do require high prices in order to have margins and that competition does push margins closer to costs. But, most people learn about these effects in the checkout line rather than econ classes. From those experiences, the explanation a lot of people have come up with is "If its cheaper to make, charging as much or more for it is mean."

jseliger 16y ago

The term for this is "anchoring," and some of the most interesting work on it I've read is in Dan Ariely's book _Predictably Irrational_. He shows that a) no one actually knows how much they should pay for anything until b) they get some kind of reference for it, which becomes an anchor. He tells an entertaining story about running an experiment in some of his classes: he asks one group of classes how much they would pay to hear him read poetry and asks another how much they would pay to not hear him read poetry. Ariely notes that reading poetry is probably, how shall we say, not among his greatest strengths. The classes primed to pay pay; the ones primed not to, don't. His experiments do, BTW, get more sophisticated than that, but I'm not at home right now. People have "anchor" prices for books based on hardcover and softcover. Many don't realize that physical printing and distribution costs something like 10 – 15% of a book, and eBooks are not 0% by comparison. So you get lots of stuff like the OP.

mthoms 16y ago
Apple exploits this very effectively. Related HN thread is here: http://news.ycombinator.com/item?id=1244967 http://news.ycombinator.com/item?id=1244967

wmf 16y ago

Bits costs less than paper. Yes, that's why the ebook is $14 and the paper version is $16. Expecting ebooks to be radically cheaper is where people are going wrong.