[Elfwreck]

Originally Posted by spellbanisher

The people appealing to “basic economics” are making assumptions that only hold true in highly abstract models. The notion that “price reflects what the market will bear” is based on many assumptions, including that publishers know the optimal market price (i.e. that they have perfect information and are perfectly rational).

Nevermind "perfect;" it assumes they have a reasonable amount of accurate information and are applying that information sensibly to decide how to price things.

None of us expect publishers to be psychic enough to predict the next mega-bestseller, and therefore we expect new releases to be priced a bit high in order to cash in on whatever turns out to be popular. We would like to believe they are clueful enough to recognize the difference between a trendy hot-topic market and a long-tail market, and price accordingly.

For a lot of people there are moral and social elements to spending; if there wasn't, corporations wouldn't spend millions on charity and then spend millions more advertising their charity spending to the world.

No! Nobody ever boycotts authors who were dicks to their friends at conventions! And nobody ever bought a special-edition book because half the profits were going to charity.

Anyways, your equation applied to other people would only be valid if it did not falsely assume that D is unaffected by the perceived fairness of the price.

Next you're going to tell me that college students don't feel guilty for buying secondhand textbooks.

Anyways, the market doesn't really determine ebook sale price. In most industries (including ebooks) cost is determined first, and then price is set based on what the actor believes will cover cost plus desired profit.

Except the ebook market, where "cost" is assumed to be "90% of whatever it cost us to produce the paperback book, which we haven't directly calculated in years but just keep grabbing old numbers and adjusting for inflation," and "desired profit" is "enough to justify having an ebook production department, but not enough to convince the shareholders that they're actually important to our future."

It really depends on whether ebooks are a substitutable or niche good.

Anyone who thinks that books are entirely a niche good is getting stats from people who read less than five books a year. The rest of us read what's available in our budget. We'd like that to include our favorites--but if our tastes run to the Azoetia and we don't have a spare thousand dollars lying around, we buy something else instead. (Are they remotely similar? Only in the sense that people of a certain bent who like one, may like the other; contents are drastically different.) We certainly don't sit around pining until we've saved up $1200 for a used limited-edition copy of the book we'd rather read.

The same principle applies to $15 books... do I buy one book for $15 that I know I'd like, or five books for $3 that I'm less sure I'll like? If I've guessed horribly wrong on all of them, I lose; if I'm right at least 1/5 of the time, I break even; if I can guess my tastes better than that, I'm better off with the multiple cheaper books. Will I miss the $15 book I didn't buy? Sure. I'll just have to drown my sorrows in those other four books.