Paul Krugman writes about the decision by Google to shut down Google Reader. Whatever your thoughts on the good or evil nature of Google, he raises an important issue for thinking about price discrimination: there are cases where, if no price discrimination is possible, such that the seller can only charge one price to all, there does not exist a price that can possibly allow the firm to cover its costs. And this is true even if the total value consumers place on the good (as measured by their reservation prices - their willingness to pay for … [Read more...]
Voluntary price discrimination is not a new idea
Alyssa Rosenberg on crowdsourcing new movies: One thing that’s striking about the Veronica Mars Kickstarter is that you have to give at least $35, more than four times the cost of the average American movie ticket in 2012, to get a digital download of the movie. You have to give $750 to get a ticket to the premiere of the film in Los Angeles. An Andrew Sullivan reader says: What I find particularly brilliant about the Rob Thomas/Veronica Mars Kickstarter project is that the producers of a good have found a way to exploit certain consumers’ … [Read more...]
Self-publishing and the theology of free
Artsjournal.com links today to a story from Publishers Weekly at SXSW on self-publishing and the "theology of free." But what exactly is this theology? Called Self-Publishing in the Age of E, Deahl’s panel featured bestselling self (and now conventionally) published novelist Hugh Howey, author of the bestselling sci-fi series Wool, Erin Brown, a former St. Martin’s and HarperCollins editor and now an Austin based freelance editor, and literary agent Kirby Kim of William Morris Endeavor. It didn’t take long to get to core issues around … [Read more...]
Will the ACA cause prices to rise?
At Slate, Matthew Yglesias takes apart the argument by a Five Guys hamburger franchise owner that the Affordable Care Act (ACA, or "Obamacare"), with its requirements on employee health insurance, will drive up his prices. Yglesias says: no, if it makes sense to increase prices in light of potential increased profits, then that is so whether or not there are increased health insurance costs on the employer. Instead, he argues, the increased costs will simply cut into firm profits. Is that correct? Not quite. It is worth considering in a bit … [Read more...]
Tips, Charities and Businesses
This blog holds that arts managers can learn interesting things about pricing from non-arts businesses, and today I want to look at pricing of internet content. Preparation and presentation of content is not costless, and has to be financed somehow. It might be financed by the content provider herself, happy to do the work of writing a blog with no expectation of financial reward for the activity. Or it might be financed through bringing viewers to advertisers, or through a "tip jar", or through charging for full access to content, with only … [Read more...]
Why does the Indianapolis Museum of Art have Free Admission?
Preamble: I know what I don't know. Specifically, when looking at any arts organization and its menu of prices, I do not have insider knowledge of its current or potential audience, its donors, or its costs. So when I comment on the price structure of any specific museum or other arts firm, I do so only by asking questions, not by advising what it should or should not change. And with that cleared up ... Why does the Indianapolis Museum of Art have free admission? In her neighboring blog, Judith Dobrzynski describes the fiscal troubles at … [Read more...]