Wikipedia talk:WikiProject United States Public Policy/Courses/Spring 2011/Politics of Piracy (Max Klein and Patrick Berger)/Schedule/11

Is it more reasonable to expect to pay the price for a book that is at a fair price for the nation of the author, or a fair price for the nation of the consumer?

We would expect to pay the same market price for the same item in any given country (given the Law of one price) once exchange rate is accounted for. However, the Balassa–Samuelson effect argues that "the law of one price is not applicable to all goods internationally, because some goods are not tradable. It argues that the consumption may be cheaper in some countries than others, because nontradables (especially land and labor) are cheaper in less developed countries." The Balassa-Samuelson effect is the reason why services like haircuts are most likely cheaper in Sudan. From an economical standpoint, its more reasonable to expect to pay the fair price for the nation of the author instead of the consumer. Since IP is non-tradable and non-substitutible, consumer demand remains high and the producer has more power on leveling price. -Dlchu1230 (talk) 04:54, 4 April 2011 (UTC)

I think it is more reasonable to pay the price for a book at the level of the nation of the consumer. The average income of developing countries is considerably less than what it is in United States and when time would come to make a decision between eating for a week or buying a book to read, eating would always win. However, I do realize that content creators do have to preserve the value of their work and to do this they can adopt several strategies - they can release materials later in the developing world so as not to dilute the price of the work in the developed world; they can also have a tiered system where the book is released at the same time, but have it be more expensive in the developing world and then lower the price over time to make it more accessible to the common citizen. In this way, those who can afford it and want the book can get it, but those can't afford will be able to after some time. Akawow (talk) 20:55, 5 April 2011 (UTC)

I agree with A. Prabhala and L. Liang that in order to address the problem of international piracy, we must take into account the relative prices of copyrighted material that consumers face in their respective countries. Only if we look at total available resources to a consumer in a certain country, and compare that budget constraint with the price of a copyrighted product, can we gauge if the pricing of that product is reasonable in proportion to the average national income in a given country. If pricing is not in line with low levels of income, a disproportionately large number of consumers will be excluded from product purchase, while at the same time raising the incentive for piracy. This leads to a market outcome that is neither favorable to the intellectual copyright owner nor the consumer, because in such a case pirating indeed becomes a market’s natural reaction to the exclusion of consumers by copyright industries. -Kolibical 136.152.138.157 (talk) 21:44, 5 April 2011 (UTC).

I believe that it is reasonable to match the price of a book to the nation of the consumer. If a book is selling in the consumer's market, why not sell it at that market price like we do with food or clothing? If the book is coming from a developing country where the currency is weaker than the consumer country and you sell it at the market price of the developing country, yes, it's a bargain for the consumer, but it seems as if the consumer would be ripping off the author in the struggling country. Not having to pay for a book at your country's market price when it goes for much less in the country of origin would just be aiding the already-privileged when we should be helping out the not-so-privileged. (It kind of reminds me of the music industry and artists having to reduce private jet sizes because the little people don't pay for their over-priced music.) Kionajp (talk) 21:54, 5 April 2011 (UTC)

I agree that the price of a book (or any good in general) should reflect the market price of any similar good in the consumer's nation, regardless of the nation of the author (or artist.) I feel like the market of the author bears no practical relation to the product itself as an objective good, and therefore should not be applied to pricing in other countries. If I created a good that was extremely useful in my home country and decided to offer it in another country where it's useless, it's in my best interest (as a creator) as well as the consumer's interest, to price the product lower if I ever expect to move any of the shipment. It makes sense in reverse also, that if I create something very useful to other countries, that I could charge more for it, even though it goes for a pittance in my country.Raimi.michael (talk) 22:46, 5 April 2011 (UTC)

I think its necessary to price the cost of a book to the nation of the consumer. In order to allow others who are not in the high levels of income to share in the purchasing of commodities, in this case books, I believe that the pricing has to be adjusted to a realistic, fair price for both the author and the consumer. By excluding the poor from culture and knowledge in developing countries, this will only increase the acts of piracy if the industry places people in the position of choosing to spend x amount of dollars on food or on a book. There needs to be a compromise between the countries where their spendable income, especially where piracy is high, is matched to work for both parties. If the losses are up to 125 billion a year, this means that any program that would prevent people in countries such as S. Africa – where it would cost someone 42.00 USD for a dictionary – might actually lower that number and make the people who put the price on their products to re-think that the term "cheap" is not the same globally. Hectorromero (talk) 22:49, 5 April 2011 (UTC)

With my limited understanding of economics I will attempt to vomit an uneducated response. It is reasonable to assume that the author or publisher will set the prices for publications to a price that maximizes their profitability. If lowering the prices so that the book is affordable in poorer countries means increased revenue then the prices should be lower in those countries. But what is to stop these cheap books from being resold to countries where the prices are higher? Instead of aiding pirated copies of their product by selling at a low price, they should sell high and let the local pirates produce their works to people who could only afford the books at a cheap price. Lesser of the two evils from the perspective of the manufacturer I guess Rsryan (talk) 23:14, 5 April 2011 (UTC)

I agree that it would be generally better for consumers around the world if the price of a book was determined by the economic state of the nation of the consumer, however I do not think it will ever be this way. Considering the cost of resources does not vary across nations, pricing the cost according to the nation of the consumer would only lose the author and publisher money in the long run. I like Akawow's suggestion for releasing a book at a lower price in developing countries, however waiting for a little while after its release date before doing so in order to not affect purchases in more developed nations. The only problem I can see with this is how books such as collections of Shakespeare and other works from hundreds of years ago would be marketed. Honestly, I would like to see what it would look like if all books were priced only high enough to cover production costs, with the author getting nothing but fame in return. This would most likely reduce incentive to create literary works (as was the issue with piracy and how it affects major industries), but as crazy as it sounds, I would just like to see how books would be different if there was no profit motive involved in the distribution process. Gunheim (talk) 23:20, 5 April 2011 (UTC)

It is more reasonable to expect to pay the price for a book at a fair price for the consumer. In a free market, the quantities supplied to consumers and the prices these items are set at are dependent upon the demand for that product and the prices consumers are willing to pay. These prices tend to me lower than the prices authors and publishing companies would favor, obviously because these parties would want to maximize their total revenue. However, if a price for a piece of literature make for a large dent in consumers’ individual budgets, fewer consumers would spend their money on that piece of literature. Not only will this curb sales and potentially cause authors and publishers to lose money but it would limit access to intellectual goods by ordinary citizens. Generally, one would assume that a decrease in access to intellectual goods is correlated with a decrease in the variety producing intellectual goods. Jeevz (talk) 23:25, 5 April 2011 (UTC)

I think from a pure economic point of view, there is no "more fair" prices for either consumers or the supplier. In a perfect market, the price is set at the equilibrium point that is determined by the upward sloping supply curve and the downward sloping demand curve. In other words, prices ideally should be determined by the market instead of being set by people who try to determine a "fair" price for either party. However, it is a different story when the product is exported and sold in developing countries, especially when the question whether the law of one price should apply arises. I think that paying the price for book at a fair price for the nation of consumers is more preferable to reduce the incentives for piracy. But people in other countries may see this lower price as an arbitrage opportunity, making the demand of the product in the nation of consumers high and consequently pressuring the price to go up again. Zx4611869 (talk) 01:46, 6 April 2011 (UTC)

I think it is more fair to pay the price of the consumer, not the price of the author. Ideas are being bought and sold on the open market, and part of the philosophy behind Open Commons is an egalitarian access to ideas. To further this consumers should only have to pay a price for literature in proportion to their per capita income. I think that this evening out of the playing field will have a chilling effect on Western dominance in education, and a rise in eastern education. Aeforrest (talk) 23:03, 12 April 2011 (UTC)