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Rationally irrational or irrationally rational on e-book pricing

Behavioral economist Dan Ariely noticed the furor over pricing of Michael Connelly's new ebook but he's a bit puzzled:

Think about it this way — if you were going to spend 10 hours with a book, do you really care if it costs $3 more?  Shouldn’t you happily pay $0.30 more per hour of reading if the quality of the book was slightly higher or the experience was slightly better? Personally my more pressing problem is time, and if someone could assure me a better, even slightly better experience, I would pay a substantial amount more.  And for some books, those I really treasure and that have changed my view on life  –  if I were just thinking about the utility of my experience I would pay hundreds of dollars.

-Dan Ariely's blog, April 10, 2011

It's actually in the comments -- Dan's blog gets great commenters -- where some better explanations and analysis reside. The value of a book or ebook is more than simply the pleasure derived from reading it once minus the price. As the commenters note, a print book can be resold or lent. An ebook cannot. Consumers accurately conclude that the inclusion of DRM diminishes the value of digital goods.

Posted by Aaron Pressman

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