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Should the boxed version of Photoshop cost more than the digital download because the boxed version comes with higher marginal costs? What if additionally we ma

Should the boxed version of Photoshop cost more than the digital download because the boxed version comes with higher marginal costs? What if additionally we made the assumption (which Ariely is making here) that the digital download version came with more features and conveniences? I think that our intuition (especially from the software maker's standpoint) is that they could at least charge the same for both. According to classical economics, the manufacturer's costs should not have anything at all to do with deciding how much to pay for something. It's simply, "how much do I enjoy this?" Of course as we see consumers don't behave this way.

jaysonelliot 16y ago
For Photoshop, the box is just a way of getting the product to you. For a book, the physical object may be as much a part of the product as the information contained within. It's not an apples-to-apples comparison.
- siglesias 16y ago
  To quote a reviewer: "We should not let the publishers hold us hostage because we prefer to read the electronic format.” I think you're missing the principle matter: people are complaining that ebooks shouldn't cost as much as physical books because they cost less to produce. Nobody is saying they prefer physical books because they are physical objects, and nobody seems to be treating them like anything other than the same thing delivered in different ways at different costs. Find me evidence please that this whole thing isn't driven by the perception of fairness in what the product costs to produce. Edit: Vote me down all you want, but lack of evidence is still lack of evidence. I guess when emotions run high people lose the need to make rational points and just downvote. Give me some justification. Argue with me.
  - jaysonelliot 16y ago
    Quick point of etiquette - not only would I not downvote based on disagreement, it's actually IMPOSSIBLE to do so when the comment in question is in reply to one's own comment. It's a HN feature to avoid the downvote becoming a kneejerk response to back-and-forth discussions. You use one reviewer's statement that that person prefers an ebook. There's no further explanation as to why (s)he prefers that format, and no data behind it - just a single comment. I expect that the primary issue is, in fact, what you say - fairness over cost of production. That does not logically lead to your assertion that the two are "same thing delivered in different ways."
    - siglesias 16y ago
      Here's an apt analogy. Let's assume that customers preferred paperback books to hardback books, possibly because paperback books are lighter, take up less shelf space, and are easier to hold in one hand. They are, obviously, less expensive to make. It seems to me almost a given that these same customers complaining would be giving one-star reviews to the publisher for charging more for the paperback version. Under a utility model this wouldn't happen.

jaysonelliot 16y ago

For Photoshop, the box is just a way of getting the product to you. For a book, the physical object may be as much a part of the product as the information contained within. It's not an apples-to-apples comparison.

siglesias 16y ago
To quote a reviewer: "We should not let the publishers hold us hostage because we prefer to read the electronic format.” I think you're missing the principle matter: people are complaining that ebooks shouldn't cost as much as physical books because they cost less to produce. Nobody is saying they prefer physical books because they are physical objects, and nobody seems to be treating them like anything other than the same thing delivered in different ways at different costs. Find me evidence please that this whole thing isn't driven by the perception of fairness in what the product costs to produce. Edit: Vote me down all you want, but lack of evidence is still lack of evidence. I guess when emotions run high people lose the need to make rational points and just downvote. Give me some justification. Argue with me.
- jaysonelliot 16y ago
  Quick point of etiquette - not only would I not downvote based on disagreement, it's actually IMPOSSIBLE to do so when the comment in question is in reply to one's own comment. It's a HN feature to avoid the downvote becoming a kneejerk response to back-and-forth discussions. You use one reviewer's statement that that person prefers an ebook. There's no further explanation as to why (s)he prefers that format, and no data behind it - just a single comment. I expect that the primary issue is, in fact, what you say - fairness over cost of production. That does not logically lead to your assertion that the two are "same thing delivered in different ways."
  - siglesias 16y ago
    Here's an apt analogy. Let's assume that customers preferred paperback books to hardback books, possibly because paperback books are lighter, take up less shelf space, and are easier to hold in one hand. They are, obviously, less expensive to make. It seems to me almost a given that these same customers complaining would be giving one-star reviews to the publisher for charging more for the paperback version. Under a utility model this wouldn't happen.