3 ms·

I've never understood why they use a stair step function for pricing. Why not just name a continuous function for pricing and simplify the scheme?

• shingen 15y ago
  They specifically want to economically encourage bringing the house with you to get the cheapest rate (total commitment); or encourage building a larger house than you might otherwise have. A continuous function of price reduction per unit, rewards everyone as they go; Amazon very specifically doesn't want to do that (users gain benefit at every step, and are rewarded just for being at any given metric, encouraging no particular scale or usage). The price points are supposed to be mental carrots, in other words. It can of course be debated which approach is better, but I have to suspect Amazon has a lot of data on scaling and pricing from retail behavior.
  • match 15y ago
    Yes and no. Correct me if I'm wrong but tipping over into the text tier doesn't change the price of the previous data, only the data that's in the next tier.
    • jeffbarr 15y ago
      You are correct.
    • corin_ 15y ago
      That of course impacts the total cost you'll pay, but it doesn't change the fact that the more you use, the lower your average cost per GB is.
      • Terretta 15y ago
        But there's no benefit from rushing ahead.
• notaddicted 15y ago
  The pricing function is "continuous", it isn't differentiable.
  • mshang 15y ago
    I think it was meant that the marginal cost function isn't continuous.