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05-21-2010, 03:43 PM   #31
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Dramatically.

05-21-2010, 04:16 PM   #32
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Pricing of services

QuoteOriginally posted by Jodokast96 Quote
Tell that to my cable bill. And my phone bill.
Technology costs go down on a like-for-like basis. Often "things" go up because they're better.

Service costs are not like simple technology costs, though.

If your ISP must replace its electronics and dramatically increase the size of its connections every three years, to keep up with user demand, prices per megabit will fall but price of your ever-faster faster connection may not.

Cable costs are heavily dependent on the pricing of the content providers like ESPN. Their prices are Not going down. Pricing per channel may be going up and cablecos are often adding more channels. In the US, the broadcast stations with local content are now charging cablecos where they did not before. Thus ... my cable bill goes up every year.

Technology costs go down --- but that's only a part of the equation.
05-21-2010, 06:40 PM   #33
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Why is it a surprise at this point in time when last years' model starts coming down from the 'early-adopter' price?
05-21-2010, 06:57 PM   #34
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QuoteOriginally posted by Jodokast96 Quote
Tell that to my cable bill. And my phone bill.
I told that to them and fire them. Digital broadcast works good enough for me for $0.

05-21-2010, 07:41 PM   #35
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QuoteOriginally posted by Mister Guy Quote
Actually, not really. You're getting a significantly better value for your money now with cell phones. Cell phones are a somewhat odd commodity in that, like prescription drugs, the entire world's market is subsidized indirectly by the American consumer getting shafted. Cell phones were extremely expensive for very limited functionality until someone came up with the idea of bundling phone discounts to contracts. My first cell phone was several hundred dollars retail, had to be screwed into an external antenna (optional external car antenna!), and was attached to a bag that contained the battery. It was a BIG DEAL (tm) because the bag could function outside of the car, unlike other car phones which had to be wired directly into the car's electrical systems.

Once someone came up with the idea of bundling the phone right to the contract, the cost of ownership was just relocated, hidden along the length of the contract rather than paid up front. You never directly saw it unless you tried to cancel and were hit with the cost of the phone in addition to cancellation fees.

Now, mostly due to European influence and prepaid temporary phones, the American consumer is getting wise to the idea that contracts are almost never in your best interest, and the provider with a long locked in contract is not a provider that cares deeply about your happiness with them. So now the costs are swinging back the other way, and more people pay the actual retail cost for their phone. It'd be hard to say phones are more expensive though, since now you can get a Droid with unlimited talk and minutes for much less upfront AND much less per month than you used to get with the crappy analog bag phones.
My point was that people pay a higher price for more utility, but this does nothing to justify paying a higher price because it leads to more consumption, not productivity. Utility does not = productivity (how you pay for increased costs), nor does price = value (it does more, it costs more, it's really cool to surf the web on the bus, but can you afford it, is it making you more productive?)

The pharmacological issue is tied to patents in the US. It's primarily political and the economics are that of subsidy to the shareholders and management teams of key drug companies at the expense of a more diverse, worldwide lab system. Lots of literature on that. American consumers are not being jilted by foreign markets, but by their own socio-political economy.

Cellphones and other data services have become near-commodity ubiquitous, but as consumptive items. Their value in economic terms is pure churn, not productivity, so, given static household incomes, the money is coming from other sources as opportunity cost. This is not good as services are a core part of super-high household indebtedness. People become "addicted" to their cellphones at the expense of affordable housing, proper nutrition, ability to afford healthcare, and personal savings. This is a case where the "price" appears to be decreasing, but is being relocated on the balance sheet somewhere else in a non-productive capacity. The US and Canadian system of "tied-selling" of the hardware to the service has outlived its affordability. The basic cost of transmission cellphone service has not changed much for urban zones in a decade save for routine capital reinvestment budgeted on 20-year cycles; the real costs keeping per minute rates higher is the extension to rural areas, a subsidy. I would argue the current move disassociating the hardware from the service has less to do with European influence than crimped household budgets in NA. I track this stuff. It's my job.
05-21-2010, 07:55 PM   #36
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QuoteOriginally posted by falconeye Quote
In a couple of years, whenever you approach a flatscreen with your digital companion in your pocket, the flatscreen will display your preferred working environment and offer access to all your data. But not at a current iPhone price...o
Or maybe not at all. This may be a feature with no productive performance value.

A few years ago I was told my fridge would talk to my milk and other groceries and draw up a list for my next shopping trip. That utility is entirely possible today, but it has to do that in less time and with dramatically more efficiency than the 10 seconds it takes me to stick my head in the door and see what I need, and then write it on a piece of paper with a pencil.

If technology followed the economic utility curve imagined, we'd all have been to the ISS and no one would own a pencil sharpener. Most new behavioural economic studies show humans are actually becoming less efficient with some types of technology, and are struggling to stay as productive in many cases compared to older methods. In a world of increasing scarce resources, this is not sustainable.
05-22-2010, 09:32 AM   #37
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I am new to Pentax, and I don't understand all the economics behind their prices, but I am glad they have come down... my K-7 just arrived with the 18-55, and 50-200mm WR lenses, an extra battery and extended warranty for under $1200. I have been following that deal for a while, and it has essentially been the same for a few months. The trend has been that the body prices have been dropping but the lens prices have seemed to go slightly up, making the kits cost holding steady.
05-22-2010, 10:42 AM   #38
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Another aspect to consumer behavior no has mentioned yet, is that we potentially pay much more for lenses than we do for camera bodies. The low price of the K-X kits has most certainly brought new DSLR photographers to the lens marketplace. This maintains (or inflates) lens prices. I am guessing Hoya sees more total profit from sales of lens than they do from bodies.

Lens quality has more to do with image quality than bodies do. To lure consumers to buy a new camera body, we are offered more features. I think manufactures think that without continual introductions of new models, photographers will choose another brand. It is a tough business. Call me crazy, but more new digital bodies that use the 645 lenses are what will result in a competitive advantage for Pentax. If professionals adopt Pentax at the high end of the market, they we sell more APS-C systems and point & shoot compact cameras.

05-23-2010, 07:21 AM   #39
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Maybe just plain and simple supply and demand.
05-23-2010, 09:16 AM   #40
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QuoteOriginally posted by Nubi Quote
Maybe just plain and simple supply and demand.
That's part of it. However, its always more complicated than that.
05-23-2010, 04:18 PM   #41
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QuoteOriginally posted by Blue Quote
That's part of it. However, its always more complicated than that.
I realize it is rather rhetorical, but the complexity of it contributes to the make up of the market which in the end translates to the degree of supply and demand?
05-23-2010, 04:39 PM   #42
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QuoteOriginally posted by Nubi Quote
I realize it is rather rhetorical, but the complexity of it contributes to the make up of the market which in the end translates to the degree of supply and demand?
It depends on distributors, import/export tariffs, taxes, exchange rates, speculators etc. There is the actually supply & demand and there are also ways these can be manipulated either intentionally or indirectly as a result of external forces. Prices can be artificially high or low.
05-24-2010, 08:36 AM   #43
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QuoteOriginally posted by Blue Quote
It depends on distributors, import/export tariffs, taxes, exchange rates, speculators etc. There is the actually supply & demand and there are also ways these can be manipulated either intentionally or indirectly as a result of external forces. Prices can be artificially high or low.
I think that is exactly what I said.
05-25-2010, 11:24 AM   #44
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QuoteOriginally posted by Aristophanes Quote
The pharmacological issue is tied to patents in the US. It's primarily political and the economics are that of subsidy to the shareholders and management teams of key drug companies at the expense of a more diverse, worldwide lab system. Lots of literature on that. American consumers are not being jilted by foreign markets, but by their own socio-political economy.
That's not actually what I was referring to. It's currently, in the US, not legal for the two largest single consumers of medications in the world to negotiate bulk discounts. That has a major impact on the cost of medicines.
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