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From: dgary@ecsvax.UUCP (D Gary Grady)
Newsgroups: net.micro.pc
Subject: Re: software protection - dongles & economics
Message-ID: <1677@ecsvax.UUCP>
Date: Wed, 17-Jul-85 11:11:48 EDT
Article-I.D.: ecsvax.1677
Posted: Wed Jul 17 11:11:48 1985
Date-Received: Fri, 19-Jul-85 01:13:06 EDT
Organization: Duke U Comp Ctr
Lines: 30

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
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