Bryan Caplan  

The $.30 Question

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Amazon has been charging $19.77 for my book for almost a year. But very recently, they cut the price to $19.47. Why $.30? Why now? Ideas?

P.S. If someone who actually works for Amazon knows the answer, won't you please share it with us?

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COMMENTS (12 to date)
jason braswell writes:

Could be random. Amazon, IIRC, frequently changes prices by small amounts at random to try and measure demand's sensitivity to price.

Bryan Caplan writes:

But why would they wait a year, then cut it by a tiny fraction? Can Amazon really learn much that way?

Brandon writes:

I imagine this is an algorithmic change—no human was involved in this (specific) decision.

Dan Weber writes:

They probably won't learn much just from this one specific book dropping 30¢.

But when they have hundreds of thousands of books they can each lower or raise by tiny amounts, the raw data they can extract would be crushing.

John writes:

I'm an Amazon Marketplace seller and I've found that very small price reductions can result in an item that has been listed for months selling almost immediately. I imagine this phenomenon is part of the explanation.

Michal Till writes:

Some exchage rate issues?

PR writes:

If you put an item in your cart but don't actually place an order on it the item will stay in your cart indefinitely. Whenever you check your cart, you will be informed about the items whose price has changed (either upwards or downwards). So in a way this acts like a reminder of a desire of buying an item in the past. On the other hand, a price reduction (even a not so substantial one) might induce people to place an order on the item. Though I would leave the logic behind this to the psychologists and behavioral economists out there...

John Fast writes:

John: When you're selling on Amazon Marketplace you're mostly competing on price against other sellers. My guess is that most customers who buy on Marketplace, i.e. buy used, almost always choose the lowest price.

On the other hand, Amazon itself is selling new copies.

Bryan, do you know if anything significant changed recently, such as a lot of used copies showing up? Can you get copies of sales records of copies of your book being sold on Amazon Marketplace, i.e. used?

andy writes:

My guess is this is the result of the recent book-tax holiday.

David writes:

Terms of Endearment is going for $5.49. Maybe they figured that making the total 4 cents short when adding such a film would lure customers to buy another cheap movie or book?

Actually, you got me.

Boonton writes:

Perhaps it is tied to the competition & the used books auctions. Perhaps as the used price falls the Amazon computers try to keep the price no more than a certain % above the used book price. Likewise Amazon might be watching the prices on Barnes & Noble and other book sites.

Without someone from Amazon telling us, it would be a big pain to reverse engineer this algorithm.

Eric H writes:

Obviously, your retail price maintenance scheme is failing.

Seriously, why don't you self-publish and sell it yourself through Amazon?

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