On Fri, Oct 20, 2000 at 05:15:03PM -0400, Robin Hanson wrote
> When talking with a student about explaining open
> source software, it occurred to me that reporting bugs
> in a software program could signal to the producer
> that one is a high volume user of the software. After
> all, the more you use it the more likely you are to
> find bugs. And if the producer price discriminates,
> they should then charge you more for the next update,
> or at least not offer you a discount. Anyone know if
> software companies price discriminate against people
> who send in complaints about bugs?
No, there aren't. And it wouldn't make sense in an economical way
anyways. (At least in my opinion)
A power user's behaviour does not impose an extra cost upon the software
company. Software is different, in that it doesn't wear out, isn't used
up or depleted [1]. So a producer doesn't need to charge power users more,
he might wish to maximalise profits however. A power user might be prepared
to pay more for the software, as he gets more value out of it, but a
"prize discriminating" [2] producer will need to use other means then using
information the customer voluntary discloses. After all, if the consumer
finds out that reporting more bugs means paying more, he will most
likely stop doing so, or do so anonymously.
Every bug he reports does decrease the research cost for that
same company though. So it makes sense for the company to reward finding
and reporting bugs, and this is often done, through beta- programs with
"bug hunts" organised as a sort of contests.
Greetings,
Krist
PS. I am new on this list, I am not an economist, but do have an above
average knowledge of economics. I am also not a native speaker of
English. so please bear with me if I goof :-)
[1] Software has negligable production costs, but high research and
development costs. The supply of software isn't limited, the supply of
software developers is. Therefore it makes a lot more sence to charge
for access to the developers (as support charges), then for copy of the
product. There is a whole shift in the way that software companies
generate revenue going on right now.
[2] Prize discrimination is software houses have employed it
historically was targetted not so much at making people who get more
value out of the product pay more, but more at offering people who would
perceive less value in the product the oportunity to pay less. Think of
all the "competitive upgrade" offers, we had in the early nineties.
--
Krist van Besien [EMAIL PROTECTED]
