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Let's say a trade paperback has a list price of $12.50, and the hardcover has a list price of $25. (The publisher and the author get the same wholesale price regardless of how big a discount the retailer offers.)
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I'm not sure exactly what point you're making here, but it seems a bit murky.
The publisher gets the wholesale price, but the author's royalty is based on the retail price.
Except that most author contracts give a certain percentage for normally-discounted books and a much lower percentage (such as half as much) for books sold at a higher discount, such as that demanded by B&N so that it can knock 45% off the list price of a bestseller. If the discount to the retailer is steep enough, it will count as a promotional price that pays the author nothing.
You're right that the production and distribution costs don't determine the price. Price is determined by what the market will pay. But lower ebook production and distribution costs mean that an ebook
can sell for less, and the public knows it, and the public feels that ebooks have less value than hardbacks, and so they expect lower prices than what they're being offered.
I don't have any hard, statistical evidence that a reasonable price leads to less piracy. I could be wrong about that. I could understand that some people are just not socialized enough to
not steal if they can get away with it. But I can also imagine that even people who do recognize the value of paying for what you get could be ticked off when they view the price as exorbitant, as "price gouging" for whatever reason, and I can see this group turning to piracy out of spite.
I'm sure the reasons for piracy are many and that there's simply a group who will pirate for the fun of it even in the face of legal, affordable alternatives. The trick isn't to eliminate it, but to motivate enough people to pay your price that you can sustain your business.