[latepaul]

Originally Posted by Turtle91

Good points latepaul.

I would caution against your housing price example though. I would agree that most people don't take into account the cost of construction of a house when they are purchasing it from someone else - "pre owned" so to speak. They do look at the value (at least the banks do) when they get an appraisal of the house, which is looking to see how much similar houses have sold for in the same area. But people who are having a new house built, or (to a slightly lesser extent) buying a new house from a developer, most certainly DO look at the cost of the construction. It determines what kind of house, with what amenities, on which plot they will build. If Builder A tries to sell me the same style house for 40% more than Builder B, when Builder A's construction costs are drastically lower because I am using lower quality materials/options than Builder B, then I most certainly would not be buying from Builder A. For your example to work you would need to compare purchasing a "pre owned" house with a "used" book.

I thought someone might say this. But what you're doing here is actually comparing value in this case the quality of the build. You're not saying I'll pay more for house B because it cost more to make you're saying I'll pay more because I believe it's better quality of build, I'll have fewer problems, less repairs etc.

I also agree that we are somewhat in a transition phase as far as ebooks are concerned, but I think people have a fairly good idea about what they are willing to pay - even if they don't do the mental exercise of realizing that ebooks cost much less to produce, therefore should cost less. People know that a basic (old style) incandescent light bulb is easy to produce...they innately know that it should be cheap, even if they don't know the actual cost of production. They also have a pretty good grasp that LED lights are a bit more complicated to produce and therefore would cost more. I don't think you would ever find anyone who will look at the two bulbs side by side on a store shelf and be willing to pay $50 for a single 60 watt incandescent bulb when the LED is $35.

I don't think so either but I don't think most people do the mental check of probably cost of production. I think they're just used to the price of bulbs. When a new item comes on the market then people start wondering whether something is worth it and maybe speculate about production costs. Over time they get used to the price (which may come down, or not) and either feel it's worth it or not.

The more the topic of ebook pricing comes up, the more opportunities there are to educate people. If we all act like penguins and follow the publisher's lead jumping off the iceberg, then we will all think that an ebook should cost $24.95...because that's how much hardbacks cost. Yet if we get people to think through the very basic idea that ebooks should cost less because they are so much easier to produce, then we can have a fairly priced product that makes everyone happy.

See you've just thrown out all my supposed "good points" and reduced it to "should be lower in price because it costs less" again. Costs is a factor for some people, based on the principle argument. However there are other factors - to do with perceived value - that govern what people see as "a fair price". For some people and some books this will be different from other books for other people.