You basically described the economic concept of consumer surplus. When a product is entirely dependent on the price a consumer is willing to pay because the supply is infinite, the natural result is… this.
Except they shouldn’t be price discriminating; it’s easier and more effective to just offer tiered pricing structures (e.g. collectors editions) and eventual sales (e.g. 50% off after a year) to hit people at different places on the supposed consumer surplus curve. As you note, the undermines your confidence in the prices but you’re likely a little lower on the curve compared to the “must have on day one” crowd.
That said, the whole theory also explains why freemium is so attractive. When there’s no price minimum, the optimal price is 0 and you work your way up with features and perks (while also raising the price people are willing to pay by getting them hooked). It’s all nasty business, lol
You basically described the economic concept of consumer surplus. When a product is entirely dependent on the price a consumer is willing to pay because the supply is infinite, the natural result is… this.
Except they shouldn’t be price discriminating; it’s easier and more effective to just offer tiered pricing structures (e.g. collectors editions) and eventual sales (e.g. 50% off after a year) to hit people at different places on the supposed consumer surplus curve. As you note, the undermines your confidence in the prices but you’re likely a little lower on the curve compared to the “must have on day one” crowd.
That said, the whole theory also explains why freemium is so attractive. When there’s no price minimum, the optimal price is 0 and you work your way up with features and perks (while also raising the price people are willing to pay by getting them hooked). It’s all nasty business, lol