P3D Re: 3-D CD pricing

[roberts@xxxxxxxxxxxxxxxxx (John W Roberts)]

>Date: Mon, 11 May 1998 14:43:18 -0600
>From: Allen French <allen.french@xxxxxxx>
>Subject: P3D Re: 3-D CD pricing

>Like Dana, I have not signed up for the 3-D CD yet because I
>think the price is on the high side. 

You and Dana are entitled to your opinions (and Dan *did* ask for feedback).

>I don't subscribe to the labor theory of value. Many of us put hundreds
>of hours of work into the things we do, but the value of the product is
>determined by those willing to buy it-not by our time or
>marketing and design costs.

That statement leaves out so many important factors that I would consider it
incorrect. "Value" varies from person to person and according to circumstances:
if that were not the case, trade would serve no purpose, and would pretty
much disappear. Price and value are not the same thing. To say that only
the buyers' notion of value has any significance is to ignore the issue of
whether there will be anything available to buy.

Traditional economics models a buyers' curve (at A dollars per unit, B units
will be bought, plotted as a curve for a range of prices), and a sellers'
curve (at C dollars per unit, D units will become available on the market),
and price and sales volume will tend toward the intersection of the two
curves.

That's a much better model than "the buyers alone determine the price", but
even so it makes a great number of simplifying assumptions, and I'm not
convinced it's all that great a model for things like personal computers,
pet rocks, and high priced collectors' art.

By discussing how much labor was put into it, Dan is telling us something
about where his "sellers' curve" is (and stating it as fixed price,
limited production defines the curve even more precisely :-).

Descriptions of the disc are a form of "marketing", which have the effect
of influencing the "buyers' curve". Most of us have not seen the disc,
and many of us would be interested in getting one, so the marketing in this
case is generally considered to provide utility to many of the readers.

John R


------------------------------