Profile image
By Capitalists@Work (Reporter)
Contributor profile | More stories
Story Views

Last Hour:
Last 24 Hours:

The BBC is Not Always Rubbish

Monday, April 10, 2017 3:45
% of readers think this story is Fact. Add your two cents.

(Before It's News)

Contentious sentiment, huh?  But, just once in a while …

Here’s an interesting BBC article on a good Capitalist topic: ‘two-part pricing‘ – the sale of (e.g.) below-cost printers to hook you on their overpriced ink: a phenomenon that sometimes makes one grind the teeth.  Rent-seeking; they’re all at it.

Anyhow this Beeb writer attributes it to Mr Gillette and his razor-blades.  (Did giving kerosene lamps to eskimos** post-date this?)  It’s all a bit entry-level, but he goes on to discuss the dynamics of two-part pricing more generally:  locking the customer in via patents on the refills, or technology for the same effect – those bastard chip-readers that prevent you from using a knock-off.  (The software in my printer is yet more subversive than that: but I’m even smarter still …).

Also discussed are the psychological factors which is where it gets really interesting, for economists as much as psychologists.  “Two-part pricing can be highly inefficient, and economists have puzzled over why consumers stand for it. The most plausible explanation is that they get confused.”  Well, maybe.  But yes: teaser-rates, free trials, ‘customer loyalty’, inertia in general – all phenomena worth recognising.  And the really serious matter of barriers to exit / barriers to switching:  hey, I spent some time in the enterprise software business and believe me, the thought of switching out of a big, more-or-less reliable piece of enterprise s/w is enough to make most companies stay rooted to the spot in a cold sweat, long after they should have jumped ship.

Good old Beeb, eh?   (*ducks*)


** am I allowed to say that?  or should it be native Inuit-type Canadian indigenous peoples


Report abuse


Your Comments
Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

Top Stories
Recent Stories



Email this story
Email this story

If you really want to ban this commenter, please write down the reason:

If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.