Ask YC: Why do people value digital goods less? | Hacker News Reader

Ask YC: Why do people value digital goods less?

2 pointsagentbleu4 comments

When I was living in first life, you would do some work, the value would be clear, and when finished you would get paid (real cash). That cycle would continue and the wheel went round.

But since I've gone all digital, I notice there are very different culture. No matter if working for someone else or self-employed, this industry has a unique set of rules, this is quite normal, all sectors have their idiosyncrasies, but there is something peculiar to digital goods. They are not valued the same as 'real products'.

Why do you think this is? and how can this be changed?

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It woudn't change. The marginal cost of digital goods is zero. Simple economics pushes the price to that cost and there's a dead zone of micropayments where the mental cost of just evaluating the price is higher than the $ price.

Cost of finding the goods is not making things easier, they have already spent more than what they're willing to pay to find your product, and now they're expected to pay?

Digital goods tend to be inferior goods with inelastic demand curves. As your income rises, your consumption of them doesn't go up after a certain point and people aren't likely to pay more for a digital good once they have something that is "good enough".

The DTrace guy blogged about this here http://blogs.sun.com/bmc/date/20040828

i think its because it is human nature to require something that is available for our senses in order to see that it exists and assign value to it. as kids we look at, feel, smell, and try and eat pretty much everything in trying to evaluate it. we're not that much different as adults.

if we can only see the product, or only hear the product, i think that by our own distinct human nature, we're going to want to value it much less than something we can hold in our hands and stick in our mouths. even if its the exact same thing, just printed out in tangible media.

it'll take some time to get used to it, but eventually the entire culture will acclimate to it. but thats what it'll take -- the entire culture making a conscious change, and everything appropriately changing with it. as an example, the younger kids and adults now are much more used to it than our parents (and bosses) are.

It's surely invevitable - if a "good" can easily be replicated exactly then its value plummets inexorably to zero.

The interesting question is how this will change our concepts when /material/ goods go down the same route. We already have very crude 3-D printers. Eventually we'll have 3-D "photocopiers". Imagine what will happen to, say, the luxury goods market then, when you can say to your friend, "can I copy your Rolex"?

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