What is with the lower price entitlement?

[MauttyKoray]

As someone who both signed the petition, own the PS3 version, and will be getting the PC version, I really need to understand this.

I'm not understanding people's train of thought on waiting for the game's price to reduce to $15 or lower to buy it... As it is, we're being offered the game for (using US price as a base) $40 on PC release. Please show me a large chain store where you can find a new copy of Dark Souls for PS3 or 360 (and not a discount store)for less than that, not including sales.

Walmart: $40
Gamestop: $40
Target: $40
Bestbuy: $40

Now guess what? We're also getting a DLC with all new content, areas, bosses, equipment, etc. This is EXTRA, NEW content, not content kept out of the game to release later, FOR FREE.

Console players will have to pay probably around $15 for the new content. Now, the console players have had to pay $40-$60 (if bought on release) for the game and will now also pay for the DLC content. In total, they will be spending $55-$75 for the exact same content we will be paying %40 for...

Again, what in the hell is your train of thought? GFWL? Oh big frikkin deal, if you really want to play the game put up with it, we've had to for Dawn of War and Batman, you can for Dark Souls. Is it the PC optimizations, cause if I'm not mistaken it was just released that there are indeed PC optimizations past just keyboard and mouse.

So please, if none of this is getting through, explain to me just how it is that you think that $40 for a game with free 'pay for DLC' content and optimizations for PC that you guys were ♥♥♥♥♥ing about it not having the whole time, is not worth the price?

All I see are a bunch of self-entitled brats that asked for something (if you signed the petition) and are ♥♥♥♥♥ing about it because you're getting it but not exactly the way you want it. If you didn't sign the petition, you have NO room to complain about it.

[Sifer2]

Well Steam sales spoil people. Usually they just decide they don't want to pay that much an then search for any reason they can to justify it. GFWL absolutely sucks though. But as you say I will tolerate it as the game seems good enough to be worth it and it seems it will be a good port after all aside from the crappy choice of multiplayer client.

[Rouge Chicken]

Amazon. (http://www.amazon.com/Dark-Souls-Playstation-3/dp/B004NRN5EO/ref=sr_1_1?ie=UTF8&qid=1344212760&sr=8-1&keywords=dark+souls)

[mlcarter815]

My backlog of games is a factor for me. I have a bunch of games that I have either not beaten or barely played yet. Plus, I've been snake bitten by too many games paying full price.

[Baresark]

There is nothing inherently wrong with waiting for the price of a game to drop. With the number of release out there, there is no harm in waiting till you are at least done playing other games that may be coming out at the same time that you are perhaps looking forward to more.

All of that said, I don't take people seriously on this or any other forum. What they do is say they are going to wait till it's "$5" or some such thing as a form of insult. I see those comments rampant on this forum more than any other, just about. But really, if they were so upset about the game, they wouldn't buy it at all, even on sale. But they want to say something hurtful and insulting so they say they are going to wait for the game to be super cheap. As far as I can tell, anyone who is a PC gamer and has played this game is pretty much buying it first day (like myself for instance). But people like to ♥♥♥♥♥ and complain. I love this game, but I am still taking a chance on buying this day 1. But I think that ultimately, it's going to be great compared to the console version. We'll see what happens, but by and large people are just saying things for the sake of saying things. They love to hate on it because it's not perfect or they know it won't be perfect.

Daniel Kahneman wrote that people can't view things in a vacuum, and he is quite right. People always put things in comparison to other things, ergo we have the comparisons with Alan Wake, a game that is the golden standard of ports at this point (even though it had some major flaws such as textures being terrible 720p textures). That also means they cannot view GFWL in a vacuum either. If they have had one sour incident with it, they are biased against it. The argument that they should wait and see how GFWL is on the game only exists as a form of logic, but people are irrational by nature (therefore we must drop on pretense of the rational agent model of thought that many mistaken researchers take). That will then, by extension, also preclude any hope of a comparison (even before release) of this not being held next to the console version. The line of thought works as: The console version has "console" features, therefore it is already not "good" compared to games made for the PC.

That last paragraph was a bit long winded, but the general idea support why people who have already played this extensively on a console are supporting this so much on the PC, and why people who have not played it are so dead set against it (at least some). All of that can be summed up into what's called the Halo Effect. People who like the game have a bias in favor of the game and the shortcomings seem almost easy to get passed. This works against it however for people who don't generally play console games. Consoles start inferior, therefore since this was a console game first, it is by extension inferior, whether it is or not.

Kahneman also talks extensively about economics (the thing he won a nobel prize for, despite not being an economist). Any company should seek to remove the risk from buying the game as much as possible. For instance, they could guarantee refunds for the first week of release. People would be more inclined to purchase it for full price, and usually when people buy something they are not so inclined to return it. Don't let the return line at Walmart fool you. It may seem like a lot of people are returning things, but it's probably in the vicinity of 100000th of 1% of sales made at that store in a weeks time.

But, I digress... people complain. We are social creatures therefore it's more socially fulfilling to take a stance against something that others already hate (aka. GFWL, PC ports, consoles, etc.), at least in the case of an internet forum.

[Harley Gorillas]

Amazon. (http://www.amazon.com/Dark-Souls-Playstation-3/dp/B004NRN5EO/ref=sr_1_1?ie=UTF8&qid=1344212760&sr=8-1&keywords=dark+souls)

So the console version being on special with a retailer means that the PC version has to be the same price as well.

[Strid]

Walmart: $40
Gamestop: $40
Target: $40
Bestbuy: $40


If you're going to do something, do it right. These prices, save Target's, have been standard for a long while now.

Wal-Mart: $30 (http://www.walmart.com/ip/Dark-Souls-PS3-PlayStation-3/15907305)
Gamestop: $30 (http://www.gamestop.com/ps3/games/dark-souls/95521)
Target: $27 (http://www.target.com/p/dark-souls-playstation-3/-/A-13475916)
Best Buy: $30 (http://www.bestbuy.com/site/Dark+Souls+-+PlayStation+3/2758067.p?id=1218348989322&skuId=2758067&st=dark%20souls&lp=1&cp=1)

Not that the entire point of the thread wouldn't be incredible juvenile if your prices were properly stated.

[MozillaCarlos]

If you're going to do something, do it right. These prices, save Target's, have been standard for a long while now.

Wal-Mart: $30 (http://www.walmart.com/ip/Dark-Souls-PS3-PlayStation-3/15907305)
Gamestop: $30 (http://www.gamestop.com/ps3/games/dark-souls/95521)
Target: $27 (http://www.target.com/p/dark-souls-playstation-3/-/A-13475916)
Best Buy: $30 (http://www.bestbuy.com/site/Dark+Souls+-+PlayStation+3/2758067.p?id=1218348989322&skuId=2758067&st=dark%20souls&lp=1&cp=1)

Not that the entire point of the thread wouldn't be incredible juvenile if your prices were properly stated.

Yeah except... the console versions have been out for almost a year now...

[Strid]

Yeah except... the console versions have been out for almost a year now...

You missed the mark my good fella. Not the point. The person quoted the prices wrong, I was fixing that for them.

[MozillaCarlos]

You missed the mark my good fella. Not the point. The person quoted the prices wrong, I was fixing that for them.
Yeah, but...okay :(

[Baresark]

Yeah except... the console versions have been out for almost a year now...

The math on these forums is amazing. By the time this comes out, it will have been actually about 9 months. Which is a three month difference from a year, which is a substantial amount of difference in my book. Not that it matters. From game retailers, new is $40 on consoles. Game retailers do not price match department stores, they never have and never will. Same goes for Stem. If you can buy it cheaper, then go buy it on the console. Life is that simple. I paid $70 for the special edition on my PS3, no regrets. Still one of the best games I ever played.

As I stated in my previous comment, the folks who have played this are all about buying on the PC. But, why trust experience when you can be one of the cools kids and be a social butterfly. Don't buy it, you don't make that much of a difference. But I now it's neat to think you are making a difference, even if you are delusional.

PS. That was not aimed specifically at the person I quoted, just this tired subject in general.

[MozillaCarlos]

The math on these forums is amazing. By the time this comes out, it will have been actually about 9 months. Which is a three month difference from a year, which is a substantial amount of difference in my book. Not that it matters. From game retailers, new is $40 on consoles. Game retailers do not price match department stores, they never have and never will. Same goes for Stem. If you can buy it cheaper, then go buy it on the console. Life is that simple. I paid $70 for the special edition on my PS3, no regrets. Still one of the best games I ever played.

As I stated in my previous comment, the folks who have played this are all about buying on the PC. But, why trust experience when you can be one of the cools kids and be a social butterfly. Don't buy it, you don't make that much of a difference. But I now it's neat to think you are making a difference, even if you are delusional.

PS. That was not aimed specifically at the person I quoted, just this tired subject in general.

I said almost... :(

[CactoHombre]

Yeah I dont get it either, first they make a petition to GET the game, and then act surprised when it actually took time and money to develop and therefore they have to pay what is still a pretty good deal for one of the better games of late, not to mention the additional content we get for free whereas the consoles also have to pay for that (of course no word on pricing for that as of yet, but I think its safe to say its the same price regardless of platform if you were to buy the game + dlc this very day).

You wanna complain about something? Australians are paying $70 for the game for no reason whatsoever a part from greedy publishers. Thank god for GreenManGaming.

[puppymang]

you can actually get dark souls for 30 dollars at greenmangaming with the coupon PCGMR-ALLIN-GREEN it should work until august 10

[Omocho]

People are whiners.
That's all there really is to it. We're not getting all the used console copies of Dark Souls, this is a brand new launch, for PC.

$40 is a fantastic pricemark. It's incredibly cheap for a brand new game. I don't care if it was released 50 years ago on a console, that doesn't make it not new on the PC.
They could easily have charged $60, and hell they might as well have with all this whining about price already.

Content wise the game is worth well over $100, so anything below that is a steal.

[puppymang]

People are whiners.
That's all there really is to it. We're not getting all the used console copies of Dark Souls, this is a brand new launch, for PC.

$40 is a fantastic pricemark. It's incredibly cheap for a brand new game. I don't care if it was released 50 years ago on a console, that doesn't make it not new on the PC.
They could easily have charged $60, and hell they might as well have with all this whining about price already.

Content wise the game is worth well over $100, so anything below that is a steal.

hue
im cheap and i managed to get the game for 25 dollars at GMG which i think is a fantastic deal
couldve gotten it lower too.. i think 15 dollars but i pre ordered too early

[Sifer2]

hue
im cheap and i managed to get the game for 25 dollars at GMG which i think is a fantastic deal
couldve gotten it lower too.. i think 15 dollars but i pre ordered too early


All that matters is that your buying it really. GMG is taking a loss most likely in attempt to make you a loyal customer. But its another sale for the game during its launch window which is what publishers look at to determine if a game is a success. It's waiting to buy the game during a steam sale some months down the road that will make the game look like a failure.

[Rouge Chicken]

Please show me a large chain store where you can find a new copy of Dark Souls for PS3 or 360 (and not a discount store)for less than that, not including sales.

Walmart: $40
Gamestop: $40
Target: $40
Bestbuy: $40



So the console version being on special with a retailer means that the PC version has to be the same price as well.

The ignorance in these threads, it saddens me :(

[puppymang]

All that matters is that your buying it really. GMG is taking a loss most likely in attempt to make you a loyal customer. But its another sale for the game during its launch window which is what publishers look at to determine if a game is a success. It's waiting to buy the game during a steam sale some months down the road that will make the game look like a failure.

you really think theyre taking a loss?
i think theyve gained a lot of new customers with all the pre order deals theyve been having and the free stuff they give
im not exactly sure how they do this though.. but eh
maybe its time to go ask GMG

[Ersatz Nihilist]

PC games cost less because they don't suffer from the hardware manufacturer taking a chunk of money per unit in fees. It's not "entitlement", more that if PC owners pay the same cost as console owners, more money is made out of them per head.

Additionally, when consumers are arguing for maintaining higher prices, you know that something has gone horribly wrong with Capitalism.

[Solona]

PC gamer entitlement.

[CactoHombre]

PC games cost less because they don't suffer from the hardware manufacturer taking a chunk of money per unit in fees. It's not "entitlement", more that if PC owners pay the same cost as console owners, more money is made out of them per head.

Additionally, when consumers are arguing for maintaining higher prices, you know that something has gone horribly wrong with Capitalism.

Its already cheaper, $40 as opposed to $60 or whatever it was on console release.
The fact that they dedicated a good few months of work time to this also means there was definitely some cost of development. Programmers, artists, animators etc all need to eat, and Bandai wouldnt have green lit this for a $20 price tag or whatever people are demanding.

[Ersatz Nihilist]

Its already cheaper, $40 as opposed to $60 or whatever it was on console release.
The fact that they dedicated a good few months of work time to this also means there was definitely some cost of development. Programmers, artists, animators etc all need to eat, and Bandai wouldnt have green lit this for a $20 price tag or whatever people are demanding.

But the point is that it'll happily hit $20 at some point, and I doubt it'll be a huge timescale and people like me will happily wait to buy it. I'm certainly not prepared to pick it up at anything but a bargain price for numerous reasons - first and foremost because I bought the console version!

So really it doesn't matter what Bandai think it should cost - nothing has inherent value and people will always pay what they think it's worth. What I object to is the subversion of the Capitalist ideal by consumers advocating higher prices and complaining about "entitlement" - which in itself is terrible word these days, steeped in aggressive personal judgement, egged on by the media.

I'm absolutely entitled to pay what I want to pay, provided I understand that I can't have it until the price it's at is there. I want it for $20 and I'm pretty sure I'll have it by the end of the year.

[Eat_the_Path]

The costs with digital distribution go down, not up. Maybe that's why.

[Baresark]

I said almost... :(

Haha, I didn't mean to sound like I was attacking you, I was not and I apologize if it came off that way. Everyone on the various hate threads say that, so now I'm just tuned to roll my eyes and correct. But people do need to recognize that in a games life cycle, the difference between 9 months and a year can mean some pretty significant things.

[Baresark]

But the point is that it'll happily hit $20 at some point, and I doubt it'll be a huge timescale and people like me will happily wait to buy it. I'm certainly not prepared to pick it up at anything but a bargain price for numerous reasons - first and foremost because I bought the console version!

So really it doesn't matter what Bandai think it should cost - nothing has inherent value and people will always pay what they think it's worth. What I object to is the subversion of the Capitalist ideal by consumers advocating higher prices and complaining about "entitlement" - which in itself is terrible word these days, steeped in aggressive personal judgement, egged on by the media.

I'm absolutely entitled to pay what I want to pay, provided I understand that I can't have it until the price it's at is there. I want it for $20 and I'm pretty sure I'll have it by the end of the year.

You are quite correct about something being wrong if people are fighting for a higher price. People have a hard time understanding that things depreciate in a value over time. This is actually a positive element and not a negative element as people make it out to be. I also think people get confused between supporting a business you like and charity. As I said in my previous post, there is nothing inherently wrong with wanting to pay a lower price, but people think there is. They think it's entitlement or some such thing as if you are saying that you deserve it for a lower price. But you will wait to get it. People who want it now pay more, and people who want to wait six months get it cheaper.

I also think the OP was making a statement against people who use the, "they will wait till it's X price", as a form of insult. This goes to the other side of the argument where they are determining worth based on rumors and speculation, all the while never having played the original product. I mean, you as a person who has played this game has to have rolled your eyes and made a very audible sound indicating your annoyance when you see a comment that said, "I'll buy it when it's on sale for $5." As I said there is nothing inherently wrong with wanting to pay less, but they are using that an indicator to how bad the game is versus actually waiting for it to be $5 because they don't have a lot of money. If they truly had no inclination to the game at all, they would simply not buy the game.

[Baresark]

The costs with digital distribution go down, not up. Maybe that's why.

I think you would be surprised by the cost of digital distribution. For instance, say you are making a game using the UDK and then selling it on Steam. Between licensing and distribution costs, that is %55 off the top before taxes. Namco Bandai has to pay a licensing fee for the engine the game is made on (which is not their own) and then when it comes to Steam they are paying an additional 30% for distribution. The platforms made to make game production and distribution easier have not really made it any cheaper. Though, after further research, PhyreEngine (the proprietary engine the game is made on) is actually free. That is a good call really. But that does still mean that any Steam version come with a 30% cost of sale still.

Usually, when things are made to make other things easier, it doesn't necessarily mean they are any cheaper. In terms of basic economics, money buys time, not more. Take getting your car fixed by a mechanic versus fixing it yourself. You pay money for someone else to fix it to save you time. When people are making the judgement on whether to fix something for themselves or take it to a mechanic, they are really determining the value of their time. You pay more for skilled labor as their time is not only worth more than unskilled, but because they will do the job much quicker on their time.

[KalROFL]

The game has a marginal cost of $0. It's absurd to pretend that people aren't entitled to claiming the cost should be whatever they want. There is no real economic justification that the game should be priced at anything above $0, at least in the long-term.

Personally, I think $40 is sort of high. Some anecdotes from Valve also reinforce that lower price-points can lead to far greater revenue. This is obviously more true as the marginal cost of a product decreases. In the case of digital content, the marginal cost is 0.

It's just silly that people cry "entitlement!" whenever anyone makes a claim that the game is not priced how they wish. As though people aren't actually entitled to determining for themselves whether something is reasonably priced.

[TheStealthyOne]

you really think theyre taking a loss?
i think theyve gained a lot of new customers with all the pre order deals theyve been having and the free stuff they give
im not exactly sure how they do this though.. but eh
maybe its time to go ask GMG

They buy Steam keys in bulk.

[Baresark]

The game has a marginal cost of $0. It's absurd to pretend that people aren't entitled to claiming the cost should be whatever they want. There is no real economic justification that the game should be priced at anything above $0, at least in the long-term.

Personally, I think $40 is sort of high. Some anecdotes from Valve also reinforce that lower price-points can lead to far greater revenue. This is obviously more true as the marginal cost of a product decreases. In the case of digital content, the marginal cost is 0.

It's just silly that people cry "entitlement!" whenever anyone makes a claim that the game is not priced how they wish. As though people aren't actually entitled to determining for themselves whether something is reasonably priced.

The game does in fact not have a marginal cost of $0, as you say. I would be interested in knowing how you arrived at that number. Just look at this definition:

The marginal cost of an additional unit of output is the cost of the additional inputs needed to produce that output. More formally, the marginal cost is the derivative of total production costs with respect to the level of output.

I can only think you are talking in respect to digital sales only. But the only games that have exclusively digital sales are indie titles and game DLC, with rare exception. Also, any company has the right to ask whatever they want for any item while the consumer has every right to to deny them any money until it's at a price they deem fair. That is just how the market works. The owner of an item has every right ask what they think is a fair price for the product, that is one of the advantages of having the right of ownership. It's the same reason as to why people who own games have a right to sell those games when they no longer want them.

Will a company sell more if it's cheaper, yes. Will they get no sales if the price of said object is high, no, they will still get sales, but most likely less sales. Companies need to maximize profit potential by charging little enough that they sell a lot of units, but charging enough that it's not a waste of their time and resources. Your claim that the price over a long period of time should become $0 is absurd, if for no other reason than there is no real world analog of that.

[xNonox]

Because it's a port? The quality of the port won't be super amazing for reasons mentioned in this forum 1000 times. That's why it costs less.

[KalROFL]

The game does in fact not have a marginal cost of $0, as you say. I would be interested in knowing how you arrived at that number. Just look at this definition:

I can only think you are talking in respect to digital sales only.

I said that I was referring to digital sales. In the case of digital sales, it should be clear that the marginal cost of the product is $0.

However, even physical discs have an extremely low marginal cost.

But the only games that have exclusively digital sales are indie titles and game DLC, with rare exception. Also, any company has the right to ask whatever they want for any item while the consumer has every right to to deny them any money until it's at a price they deem fair. That is just how the market works. The owner of an item has every right ask what they think is a fair price for the product, that is one of the advantages of having the right of ownership. It's the same reason as to why people who own games have a right to sell those games when they no longer want them.

Why are you mentioning all of this? I haven't said anything to the contrary.

Will a company sell more if it's cheaper, yes. Will they get no sales if the price of said object is high, no, they will still get sales, but most likely less sales. Companies need to maximize profit potential by charging little enough that they sell a lot of units, but charging enough that it's not a waste of their time and resources. Your claim that the price over a long period of time should become $0 is absurd, if for no other reason than there is no real world analog of that.

"Over the long term" means more than "over a long time." The statement I was making was more along the lines of:

As time elapses, the price of a digital product necessary to recoup losses approaches $0.

this would be more formalized with some context involving limits and functions.

Claiming that there are "no real world analogs" of this is silly. It's common knowledge in economics that, as time progresses in a perfectly free market, the sale-price of an item will approach its marginal cost. In the case of digital items, this marginal cost is $0. You want a real-world example? Just look at anything with an extremely low profit margin, like most food at a grocery store.

If you want a real-world example with the marginal cost of $0, you might have to wait a while; copyright law has prevented the market from working as it should (i.e., it has prevented the market from being free). Though you can observe examples like Ubuntu vs. Windows and GnuCash vs. Quicken.

[Harley Gorillas]

The ignorance in these threads, it saddens me :(

You either misread what I said or made a good example of the ignorance in these threads.

[Baresark]

I said that I was referring to digital sales. In the case of digital sales, it should be clear that the marginal cost of the product is $0.

However, even physical discs have an extremely low marginal cost.

Why are you mentioning all of this? I haven't said anything to the contrary.

"Over the long term" means more than "over a long time." The statement I was making was more along the lines of:

this would be more formalized with some context involving limits and functions.

Claiming that there are "no real world analogs" of this is silly. It's common knowledge in economics that, as time progresses in a perfectly free market, the sale-price of an item will approach its marginal cost. In the case of digital items, this marginal cost is $0. You want a real-world example? Just look at anything with an extremely low profit margin, like most food at a grocery store.

If you want a real-world example with the marginal cost of $0, you might have to wait a while; copyright law has prevented the market from working as it should (i.e., it has prevented the market from being free). Though you can observe examples like Ubuntu vs. Windows and GnuCash vs. Quicken.

I missed the part where you said your statement was speaking about digital sales, I apologize. Your blocking method actually misses the point of having a debate, as the statements making my overall statement are intertwine and should not be addressed individually like you are doing. This is a method of distraction that many people get caught up on. I'm going to say something and you in turn are going to start asking what I mean by a certain word or to ask how I define a certain word. Then I'm supposed to respond to that when the context of what I mean by using a certain word is made plainly apparent in the context. All the while we get further and further away from the actual subject matter of what we are discussing.

For Example:
I mentioned all of those things that you did not speak contrary too because you in fact on represented the view of only the consumer in your analysis. I represented both the consumer and provider in my statement. I guess you can say I was adding onto your already sound thought. Ergo, I said those things because they were relevant in the conversation at hand and they fit into my overall statement.

This is where I start despise any economic theory that exists anywhere from Rand, to Mises, To Keynes. Asking for a real world analog is not some sort of blasphemy like so many economic theorists think it is. But they all say that "asking for a real world analog is not possible for X, Y, and Z."

I'm going to confess, I hate copyright laws and love free market economics. I'm actually a huge proponent of them except for the part where everyone wants to argue theory. I got tired of arguing theory, so I moved on. Kahneman (who used actual scientific research instead of just spouting theory all over the place) has shown that due to the Endowment effect, there will never be a cost of $0 on any item. If you desire an object, it already has a greater value than $0, and if you have an object you use, it could have a value beyond what the market price of an item is (just check out the example of Professor R's wine collection). Just to point out, I'm not using cost and value as interchangeable terms, but cost and value have a closer relationship than cost and marginal cost, at least in real world terms (once again, take a look at Professor R's wine collection).

It's common knowledge in a free market that production costs over time will cheapen and the price will drop, but having never formally studied economics I have perhaps missed the part where marginal costs magically become $0 on any item and all things follow that marginal cost. But, as the cost of game production may become $0, the fees of hosting and distributing said game may reach near $0, but will never actually be $0.

To conclude, the marginal costs are never actually going to be $0, as costs of distribution and methods of delivery are not part of productions cost directly. And the endowment effect in fact makes it more impossible for the cost to be $0 the further away from the original producer a product becomes, specifically if it ends in the hands of someone who uses it. The endowment effect is a far better explanation to the increases in cost of houses, college, skilled labor, basically anything that has a dramatic price increase over a short period of time. To boot, it's also been hard tested, it's not just theory.

PS. Some of the information is not directly related to your comments, but serve as proof of my perspective. I thought I would let you know before you say you never denied them and then asked why I even mentioned them.

[KalROFL]

I missed the part where you said your statement was speaking about digital sales, I apologize. Your blocking method actually misses the point of having a debate, as the statements making my overall statement are intertwine and should not be addressed individually like you are doing. This is a method of distraction that many people get caught up on. I'm going to say something and you in turn are going to start asking what I mean by a certain word or to ask how I define a certain word. Then I'm supposed to respond to that when the context of what I mean by using a certain word is made plainly apparent in the context. All the while we get further and further away from the actual subject matter of what we are discussing.

It's just a method of addressing points concisely. I don't feel like writing an essay response to everything, so it's easier to just address the points individually. I agree that it's not as good for having a debate, but it's a lot easier. Though I think it's excessive to say it "misses the point."

I don't know any economists personally, so I can't say if they actually don't care for real world examples. I would say otherwise, since they frequently create economic models whose sole purpose is to model the real world.

When you mention the Endowment Effect, I think you're confusing willingness to pay/willingness to accept with marginal cost. Also, there are economists who question the effect's existence. Economic theory says that WTA should equal WTP when the objects are sufficiently similar, and some contend that these examples of the Endowment Effect are just cases where the objects are not really close substitutes.

I do agree that copyright law is lame. If you're interested in some philosophical discussion on the matter, this blog (http://culturalliberty.org/blog/) is pretty fantastic.

It's common knowledge in a free market that production costs over time will cheapen and the price will drop, but having never formally studied economics I have perhaps missed the part where marginal costs magically become $0 on any item and all things follow that marginal cost. But, as the cost of game production may become $0, the fees of hosting and distributing said game may reach near $0, but will never actually be $0.

What I was saying was that, in a perfectly free market, an item's cost will approach its marginal cost. Suppose, for example, that your startup fee to make a car (e.g. creating a factory) is $1.5 million. After that, each car costs $25,000 to make. The marginal cost of your car, then, is $25,000. What I am saying is that, in a perfectly free market, the sales price of this car will approach $25,000.

Now, this is true for all products (except, as I said, ideas, whose market is enslaved by copyright law). A digital product has a marginal cost of $0 (which should be rather obvious). Thus, as time elapses, the sales price of the digital product will approach $0. This doesn't mean it will ever reach it, however. And this assumes a few ideals (like a perfectly free market and infinite time).

To conclude, the marginal costs are never actually going to be $0, as costs of distribution and methods of delivery are not part of productions cost directly. And the endowment effect in fact makes it more impossible for the cost to be $0 the further away from the original producer a product becomes, specifically if it ends in the hands of someone who uses it. The endowment effect is a far better explanation to the increases in cost of houses, college, skilled labor, basically anything that has a dramatic price increase over a short period of time. To boot, it's also been hard tested, it's not just theory.

Within the context of digital products, distribution costs can often be thought of as one-time payments (hence they don't factor into the marginal cost). The important part to realize is that the actual production cost of additional units of a digital product is $0.

If you want to be very liberal with analysis of distribution costs (again, we're assuming digital distribution), I think the marginal cost is still extremely close to $0.

Also, you should know that I have only studied basic economics. My background is in math. So it's possible that some of this stuff might be way off.

[Baresark]

It's just a method of addressing points concisely. I don't feel like writing an essay response to everything, so it's easier to just address the points individually. I agree that it's not as good for having a debate, but it's a lot easier. Though I think it's excessive to say it "misses the point."

I don't know any economists personally, so I can't say if they actually don't care for real world examples. I would say otherwise, since they frequently create economic models whose sole purpose is to model the real world.

When you mention the Endowment Effect, I think you're confusing willingness to pay/willingness to accept with marginal cost. Also, there are economists who question the effect's existence. Economic theory says that WTA should equal WTP when the objects are sufficiently similar, and some contend that these examples of the Endowment Effect are just cases where the objects are not really close substitutes.

I do agree that copyright law is lame. If you're interested in some philosophical discussion on the matter, this blog (http://culturalliberty.org/blog/) is pretty fantastic.



What I was saying was that, in a perfectly free market, an item's cost will approach its marginal cost. Suppose, for example, that your startup fee to make a car (e.g. creating a factory) is $1.5 million. After that, each car costs $25,000 to make. The marginal cost of your car, then, is $25,000. What I am saying is that, in a perfectly free market, the sales price of this car will approach $25,000.

Now, this is true for all products (except, as I said, ideas, whose market is enslaved by copyright law). A digital product has a marginal cost of $0 (which should be rather obvious). Thus, as time elapses, the sales price of the digital product will approach $0. This doesn't mean it will ever reach it, however. And this assumes a few ideals (like a perfectly free market and infinite time).



Within the context of digital products, distribution costs can often be thought of as one-time payments (hence they don't factor into the marginal cost). The important part to realize is that the actual production cost of additional units of a digital product is $0.

If you want to be very liberal with analysis of distribution costs (again, we're assuming digital distribution), I think the marginal cost is still extremely close to $0.

Also, you should know that I have only studied basic economics. My background is in math. So it's possible that some of this stuff might be way off.

I can see your point on a lot of things, and I can concede to some of them, though I do feel that going point by point would just be annoying for both of us.

When I was speaking of the endowment effect, I was referring directly to Kahneman's work. I know that Hanemann (Hanemann Kahneman... weird) disagreed with it. But to make a good infinite doesn't disprove the effect. Kahneman's first point where he questioned standard economic theory (what this effect directly contradicts in some ways) was with a Professor R and his wine collection.

Professor R would routinely go to auctions and buy rare bottles of wine. If he paid $75 for a bottle, Standard economic theory purports that the should be willing to part with them for $75. But by the professor's own admission, he wouldn't take less than double what he payed in the case of some bottles. This disrupts standard economic model. We are not talking about close substitutes, we are talking about the same item, which is also what was demonstrated in Kahneman's Mugs/Chocolate experiment. I know Shogren tried reproducing the same results with more, but if everyone has a mug and a chocolate bar, then there would be no endowment effect, or it would be so minor it may go unnoticed. I kind of get a laugh out of some of the counterpoints to it because they did not produce the same results because their experiment was different, so it would of course not have the same results. Kahneman stated in his original works that the endowment effect is only present where there was a scarcity of goods. Look at housing for example. If everyone already owned a house, the prices would be rock bottom for people selling simply because everyone already had a house and there wouldn't be market scarcity of homes. But that isn't the only linking factor in it either. It's all about whether the person has a use for it. If you buy a good and use it, your personal view on the object in question is that it has greater value beyond just the money that was paid for it. I think I may have mentioned this earlier, but that is a very plausible explanation for the increase in value of homes over a short period of time. In addition to this, the cost of the home is augmented beyond the market value by the Anchoring Effect. If you bought the house for $200k, then because you live there, it has a minimum value of $200,001 due to the endowment effect. That is why when the value of homes drop, people sit on them and not sell them. But then we are also breaking into loss aversion, which is the primary concern when people are making a decision regarding a good. As you can see, it's an ever expanding web of complexity that matches the complexity of the Cognitive mind. But I digress....

I also think that it's worth noting that Kahneman is actually a Behavioral Economist who specializes in studies around Cognitive Processes, which is why he won a Nobel Prize in Economics in 2002 I think. He has shook the field of economic studies to their core and disproven theories that have been around for really long time, the longest living one that I am aware of is Expected Utility theory. I think some of this may be sour grapes by traditional economists, but that is only speculation and not to be taken as fact.

Also, from the perspective of WTA vs WTP: many economist feel that they should not be equal at all. For instance, if you are willing to buy this game for $40, that means that you value the game(WTA) more than the money(WTP), not equally to the money. If it was equally regarded, you would not buy the game because it's not worth exchanging (all things being equal).

While we are on the subject, the main problem people have with this is the fact that it ignores the Indifference Curve. That basically states that people will buy bundles of goods with indifference to other goods, but this is patently false from a Cognitive Perspective. Even if a person is consciously indifferent, subconsciously, they are not indifferent to goods, and choices made are always based on a preference. That is one of the functions of our intuitive mental systems, to give choices to the thinking calculating part of our brains....

I'm rambling, it's all fascinating from both perspectives. This has fired me up. Haha, thanks, made an interesting night at work for me.

Edit: One thing I forgot to address: Economist don't make models to mimic the real world, they make models to explain the interactions of people in regards to economics (like physics isn't about manipulation or prediction on the atomic or subatomic level, it's about understanding what happens there). For instance, many theoretical systems of economics work off what they call the rational agent theory. But one of Kahneman's finer point is that people are not rational in almost any regard. He is using the strict definition of rationality: That is, a cohesiveness of thoughts and actions. That is the primary reason many mathematical models of economics fall short. Due to the effects of Anchoring, Loss Aversion, Endowment Effect, Halo Effect, etc., people do not act in a sufficiently rational manner that a mathematical system can predict (not that prediction is remotely possible (good old Leonard Mlodinow taught me that one)) economic conditions or even go so far as to be able to successfully explain why people make the choices they do.