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Jul 22, 2009

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Victor V Claar

I have one suspicion about my own book's pricing on Amazon. Seems like it has about 3 different possible prices. Depending on when you look, it might be $14.96, $16.50, or $17.16.

My ad hoc speculation is that Amazon is pretty aware that it's easy for us online shoppers to compare prices. So -- though it might be counter-intuitive -- I think they charge lower prices when demand grows, to make sure we buy from them and not somebody else with a lower price.

After all, the book is the same no matter where you buy it, so better charge a lower price than the competition.

This is not unlike the "putting turkeys on sale when people need them most: Thanksgiving" strategy. If they'll buy one regardless, better to have them buy one from your store, then hang around to buy their other groceries, too.

I could be dead wrong in this Amazon speculation, but it definitely seems that the price of my own book is lower at the beginnings of semesters than at other times, when college and seminary students are picking it up for their classes.

Michael W. Kruse

Fascinating! It makes good sense to me.

Katherine

"Whatever the case, I hope round number model takes hold."

I also hope that model would help lead to the elimination of the penny, which is past its time IMO.

Michael W. Kruse

Amen, Katherine.

ceemac

Any idea when the .99 strat started.

If it was 100 yrs ago then the difference between .99 and $1 may have been signficant. If you are making only a couple of $ a day then a penny is a big deal

Today it may be $5 instead of a penny that has the same psych. effect. Example: I just checked the ipod shuffle at Walmart. It's $45. Not $50.

Victor V Claar

"The Straight Dope" covered the history of the practice several years ago. It's not really my specific area of expertise in economics, so I'll defer to Mr Adams:

http://www.straightdope.com/columns/read/720/why-do-prices-end-in-99

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