Quote:
Originally Posted by SteveEisenberg
You might say that you are willing to pay $9.99, during the first month after an eBook release, to subsidize the reading room, but not $14.99. Fine. This will be reflected in Hachette sales data and they will price in the way their numbers people find maximizes revenue. But I can't buy the idea that Hachette is run by idiots who don't know what price to charge.
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I'd "buy the idea"
in a New York minute. Publishers have very little direct contact with end-buyers, so would have very little to go on in estimating price elasticities (the economic term for how price changes affect demand). Amazon on the other hand not only has large-scale direct contact, it is in a perfect position to run direct experiments to calculate these elasticities (changing their prices to book buyers and seeing how that changes demand). It almost certainly knows what its talking about (but will of course only reveal the parts of what it knows that helps its case).
So if Amazon states that books are highly price-elastic, I'd believe them -- particularly when
independent data seems to support this claim.