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Comment by ataggart | Hacker News Reader

>That is, users systematically spring for games with lower cost-benefit tradeoffs simply because they are offered for free.

Except that's not what the paper says. It just notes that the decision-making process that goes on in people's heads doesn't just include the monetary cost (duh), and that when one option is "free" some other non-monetary factor is revealed (e.g., removing the mental cost of even having to do a cost/benefit analysis).

That said, I'm troubled by your notion that when people's actual behaviour does not conform to a model, the problem is with the people.

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I'm not saying that the users know that free options have lower cost-benefit tradeoffs, but in reality, experiments show that they do, specifically the on I cited.

But you raise an interesting point. It could well be that the "mental cost of even having to do a cost/benefit analysis" is too high for many people to consider paid options. That reenforces the proposal that Apple should wean users off of low (even negative) utility free options and train them to make such evaluations efficiently, the way many of us who are used to paying for software can. Again, all of this predicated on the thesis that benefit - cost - mental cost (which improves as we learn how to evaluate software) of many paid apps is higher than the average benefit of free apps.

As for my notion that people's actual behavior doesn't conform to a model of rationality, perhaps we should agree to disagree. There is plenty of research to suggest that people are bad at making calculations and require intervention.

Actually, you bring up an interesting point - perhaps Apple already does wean off users from free options. Perhaps this is a move directed at consumers and not game producers.

Apple stands to gain nothing if users don't pay up - 30% of 0 is 0. Therefore they need to eliminate 0-dollar items from the market - but you can't go straight and do it because it would cause an uproar. So they make it infeasible for game developers to offer free games, and will extract the selling commission from the resulting non-zero priced games.

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