August 3, 2007
Bryan Caplan
Behavioral economists often emphasize nominal rigidities - such as the tendency of list prices to stay the same in the face of shifts in supply and demand.
Neoclassical economists often emphasize the Law of One Price - the tendency of identical commodities to sell for the same price.
In the market for my book, both of these regularities have broken down. Over at Amazon, the price for my book has skyrocketed to 50% above its cover price. So much for nominal rigidities.
And yet, over at Barnes and Noble, my book still sells for one-third less than the cover price - with no waiting period. So much for the Law of One Price.
Fortunately, my publisher tells me they're hard at work to restore sanity to the market. Another run of several thousand copies should ship next week or so. It's a good thing too - explaining how markets work is hard enough as it is.
Update: Amazon now says the book is in stock, and slashed the price to $17.97, a new low.
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Sure thing. My all-time peak was Monday afternoon, when I hit #8 on Amazon's Non-fiction List for an hour or so. This was clearly because of the NYT op-ed coverage that day.
In general, the biggest boosts to sales come from enthuastic recommendations from sources that wouldn't normally be enthusiastic. It's more credible, and taps an unfished pond. Thus, DeLong's praise was worth a lot more in terms of sales than any one of my colleagues'. Radio appearances seem to do little or nothing for sales; t.v. does a bit. Newspapers give you a sharp boost that fades quickly. Magazine publicity last longer but peaks lower - the Economist boost lasted for about two weeks.
And that's probably more than anyone but me wants to know!
Bryan, have you noticed any more Ivory Tower academics more partial to blogging as a result of the increasingly prominent stature of the GMU economics department on the blogosphere, especially with the attention yours' and Tyler's books are receiving?
Too bad it was short lived. I was going to put my economics training to good use and arbitrage the two sites. When the law of one price doesn't hold, it's not a problem, it's a profit opportunity.
Bryan, See if you can get your publisher to solve the Nintendo Wii supply problem... I want to buy one for my grandparents (they love the golf game), but the cheapest I can find for the $250 console in stock is about $350. It's crazy!
I was stunned to learn that used copies of my book were advertised at about 75% off list--the day my book came out. I wondered if people had bought and were anxious to sell so quickly. Finally decided the copies were being sold by people who had received review copies.
Moral: don't be too concerned about a small volume of transactions occurring at an abnormal price.
