dgary@ecsvax.UUCP (D Gary Grady) (07/17/85)
A few people have pooh-poohed the notion that stopping piracy would lead
to lower software prices. Their argument generally goes, "In Econ class
we were taught that higher demand leads to a higher price." Without
going into the wilds of economics, this is an obvious example of a
little learning being a dangerous thing.
By that logic we'd find that, say, vertical market software would be
much cheaper than Lotus 1-2-3!
The question of pricing is incredibly complicated, and comments of that
sort, like those about the "comparable worth" of books and software,
reveal considerable naivte about economics and business. Except for
cases of price gouging in which a seller overprices a bona fide
necessity that people HAVE to buy, it is difficult to see how someone
can maliciously overprice something. If the price of something is
higher than its worth to the buyer, only an idiot would buy it. When
businesses set a price they try to find one that produces the maximum
profit. A price too high pushes down volume so total revenues are less,
so villainous overpricing is its own punishment.
And why should someone price an item below its worth to the buyer just
because the cost of making it is lower? If you believe price should
only reflect actual cost, I suppose you're going to go to your employer
tomorrow and say, "Look, I work about the same hours as somebody at
McDonald's, so why don't you pay me the same thing?"
--
D Gary Grady
Duke U Comp Center, Durham, NC 27706
(919) 684-3695
USENET: {seismo,decvax,ihnp4,akgua,etc.}!mcnc!ecsvax!dgaryhrs@homxb.UUCP (H.SILBIGER) (07/19/85)
The notion that stopping software piracy would lead to lower prices is absurd. The existence of piracy puts pressure on prices. Low software prices reduce the incentive for piracy. If copying were impossible, it would probbably lead to higher prices, since buying would be the only way to obtain a specific program. In software there is no economy of scale, since the actual production costs are low. However, if the unit price is low, the development costs can be spread over more units. I do not condone piracy, it is after all stealing. I would probably buy more different sowftware programs if prices were lower, since my software budget is fixed. Herman Silbiger ihnp4!homxb!hrs
slerner@sesame.UUCP (Simcha-Yitzchak Lerner) (07/23/85)
> > The notion that stopping software piracy would lead to lower > prices is absurd. The existence of piracy puts pressure on prices. > Low software prices reduce the incentive for piracy. > I am sorry, but the facts don't agree. Future Computing did an extensive investigation of the pracy problem and found: In a survey of software usage in business, 50% of all software used on a regular basis was pirated. (This figure is actualy optimistic, the raw data was much worse). This 50% figure DID NOT VARY by price (PFS:xxx is being ripped off as often as 1-2-3), by software catagory, or by disk protection being used. (by did not vary, I mean variation was <<5%) So: as to the statements that overpricing encourages theft of software, or that this theft is actualy good for the vendors (!!) and all other wishful thinking, I am sorry, but the facts do not back you up. -- Opinions expressed are public domain, and do not belong to Lotus Development Corp. ---------------------------------------------------------------- Simcha-Yitzchak Lerner {genrad|ihnp4|ima}!wjh12!talcott!sesame!slerner {cbosgd|harvard}!talcott!sesame!slerner slerner%sesame@harvard.ARPA