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0 pointsmsluyter6y ago0 comments

I call this the dismal equilibrium. Anything free that provides value is, in brute economic terms, mis-priced. Thus, it tends to degrade due to attempts at monetization until a balance is reached between its inherent value and the pain one must endure to use/access it.

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8 comments · 5 top-level

ativzzz6y ago· 2 in thread

> in brute economic terms, mis-priced

Is this necessarily a bad thing? Or are you saying this is basically an arbitrage opportunity waiting for someone to exploit it?

How would we structure something free that provides value, and keep it free in the long term without degradation?

msluyterOP6y ago

Well, not really saying it's bad in a moral sense or making a value judgement (though it does tend to be "bad" from a usability perspective), just noting what I've observed. And it applies even to things that aren't free, but which you pay for via some fixed initial cost.

For example, I bought Words with Friends a long long time ago, and for a while it was great. But now they've added tons of gamification features like powerups that bypass game rules, social, awards, etc... to try to get you to engage more and pay more money. Now, various awards screens pop up and waste seconds of my life after every move.

I just want to play standard Words with Friends with my wife like I have for the last 10 years. But one can see that folks like me aren't making Zynga any (new) money, hence the other inducements.

ativzzz6y ago

In your example, it seems the app was not mis-priced for you. In fact, it was the perfect price, until the company decided it was mis-priced for them.

So now they add all these unfriendly features, which now makes the app mis-priced for you.

My point is that mis-pricing can be different depending on who's perspective we look at. So in an economic sense, when we say something is mis-priced, from who's perspective is it?

noir_lord6y ago· 1 in thread

> Anything free that provides value is, in brute economic terms, mis-priced.

Damn, that's a good way to put it.

I assume value includes non tangibles, otherwise open source wouldn't work.

coldpie6y ago

> otherwise open source wouldn't work

This is more a case of non-open-source software trying to force physical-world business models into a world where physicality has no meaning. Most open source development is paid for by paying for the work to be done. In other words, much open source software is not free; rather, it's already been paid for.

matheusmoreira6y ago

What if the thing provides maximum value only when it's free? Monetizing via advertising implies losing the speech the advertisers don't approve of. If we had discussion forums that didn't allow free accounts to post, we'd lose the speech of people who can't or won't pay.

Would be interesting if some rich benefactor randomly decided to run such a community.

drtz6y ago

Another side of the same coin: anything "free" that you wouldn't use if you had to pay for it isn't providing value.

rurp6y ago

That's a great term that really captures the dynamic. It's sad to see it taking effect on so many previously useful platforms.

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