Re: UKNM: free local calls baloney

[Clay Shirky]

> However, its perceived pricing that is an issue. (Well known that people

> will often plump for all you can eat pricing for any product rather than

> pay as you go, because they perceive pay-as-you-go to be more expensive:

> we're risk averse and this minises our maximum exposure.)


As has been pointed out here before, Econ 101 says "People are smart."


When you see people doing something that seems more expensive relative

to the other options, ask yourself what they're maximising - what it

is that makes them prefer the more expensive option. In the case of

flat rate pricing, the thwo things they're maximising are

predictability in the long term - I'd rather pay 20 bucks a month than

have my bill swing from 5 bucks to 30 bucks, even if that averaged out

to less over time.


The other thing they're maximising is a lack of anxiety in the short

term - even if its cheaper, I'd rather not be calculating whether what

I'm doing on the net *right now* is worth the 4p a minute I'm paying

*right now*. The importance of this in getting people to explore the

net, and to use ecommerce, cannot be overestimated.


-clay 

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