How about asking some photographers? ----- Original Message ----- From: "Alex Tabarrok" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Wednesday, January 23, 2002 3:45 PM Subject: Re: Photographers
> Tbe adverse selection story, really a price discrimination story, > assumes monopoly power in the photography market. But there is free > entry into photography and hundreds of photographers easily available in > the phone book thus price should fall to MC which implies that > photographers should be willing to give up the negatives for a penny. > > John-Charles's answer (keeping the negative is a form of quality > control necessary for the photographer to keep and maintain a good > reputation) is more promising. It could be the case that the cost of > the potential loss in reputation to the photographer is worth more than > the negatives to the buyer and thus no trade is made. The main question > I would have is whether quality of print versus quality of photograph is > that difficult to ascertain - but I'm willing to go with this for now. > > JC's answer, by the way, is consistent with price being at marginal > cost. Thus an important test suggests itself - when the photographer > has your negative is price above marginal cost for developing a print - > i.e. is the price higher than if you had the negative and went > elsewhere? I had always assumed that it was but JCs answer suggests I > should investigate further. > > Alex > > > > -- > Dr. Alexander Tabarrok > Vice President and Director of Research > The Independent Institute > 100 Swan Way > Oakland, CA, 94621-1428 > Tel. 510-632-1366, FAX: 510-568-6040 > Email: [EMAIL PROTECTED] >
