{"id":4301,"date":"2014-03-31T22:23:45","date_gmt":"2014-03-31T16:53:45","guid":{"rendered":"http:\/\/calamur.org\/gargi\/?p=4301"},"modified":"2014-03-31T22:23:45","modified_gmt":"2014-03-31T16:53:45","slug":"currently-reading-free-the-future-of-a-radical-price-2","status":"publish","type":"post","link":"https:\/\/calamur.org\/gargi\/2014\/03\/31\/currently-reading-free-the-future-of-a-radical-price-2\/","title":{"rendered":"Currently reading : Free: The Future of a Radical Price"},"content":{"rendered":"

5 years late. But still makes a lot of sense…<\/p>\n

\u201cWhy do people think \u201cfree\u201d means diminished quality in one instance, and not in another? It turns out that our feelings about \u201cfree\u201d are relative, not absolute. If something used to cost money and now doesn\u2019t, we tend to correlate that with a decline in quality. But if something never cost money, we don\u2019t feel the same way. A free bagel is probably stale, but free ketchup in a restaurant is fine. Nobody thinks that Google is an inferior search engine because it doesn\u2019t charge.\u201d<\/p><\/blockquote>\n

And this
\n\u201c<\/p>\n

With magazines it can clearly be effective to charge a minimal price, instead of nothing. But in most cases, just a penny\u2014a seemingly inconsequential price\u2014can stop the vast majority of consumers in their tracks. A single penny doesn\u2019t really mean anything to us economically. So why does it have so much impact?
\nThe answer is that it makes us think about the choice. That alone is a disincentive to continue. It\u2019s as if our brains were wired to raise a flag every time we\u2019re confronted with a price. This is the \u201cis it worth it?\u201d flag. If you charge a price, any price, we are forced to ask ourselves if we really want to open our wallets. But if the price is zero, that flag never goes up and the decision just got easier.
\nThe proper name for that flag is what George Washington University economist Nick Szabo has dubbed \u201cmental transaction costs.\u201d These are, simply, the toll of thinking. We\u2019re all a bit lazy and we\u2019d rather not think about things if we don\u2019t have to. So we tend to choose things that require the least thinking.<\/p><\/blockquote>\n

\u201cThe phrase \u201ctransaction costs\u201d has its roots in the theory of the firm, Nobel Prize\u2013winning economist Ronald Coase\u2019s explanation that companies exist to minimize the communications overhead within and between teams. This refers mostly to the cognitive load of having to process information\u2014figuring out who should do what, whom to trust, and the like.
\nSzabo extended this to purchasing decisions. He looked at the idea of \u201cmicropayments,\u201d financial systems that would allow you to pay fractions of a cent per Web page you read, or millieuros for each comic strip you download. All these schemes are destined to fail, Szabo concluded, because although they minimize the economic costs of choices, they still have all the cognitive costs.\u201d<\/p><\/blockquote>\n

Excerpt From: Anderson, Chris. \u201cFree: The Future of a Radical Price<\/strong><\/a>.\u201d<\/p>\n

Despite the title – the books costs money \ud83d\ude42<\/p>\n","protected":false},"excerpt":{"rendered":"

5 years late. But still makes a lot of sense… \u201cWhy do people think \u201cfree\u201d means diminished quality in one instance, and not in another? It turns out that our feelings about \u201cfree\u201d are relative, not absolute. If something used to cost…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[48,54],"tags":[337,460,602],"class_list":["post-4301","post","type-post","status-publish","format-standard","hentry","category-books","category-digital-media","tag-chris-anderson","tag-digital-economy","tag-free"],"yoast_head":"\nCurrently reading : Free: The Future of a Radical Price - A PoV<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/calamur.org\/gargi\/2014\/03\/31\/currently-reading-free-the-future-of-a-radical-price-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Currently reading : Free: The Future of a Radical Price - A PoV\" \/>\n<meta property=\"og:description\" content=\"5 years late. 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