In this post, Should Government Subsidize Mortgages, Tyler Cowen recommends this book for data on credit rationing. So, I hop over to Amazon to evaluate and what do I find: the price is $115 for a 384 page book with an Amazon sales rank of 1,755,070.
In his next post, Making Money From Niche Demand, he recommends, as do I, this article:
on how falling fixed costs (my terminology) will revolutionize the world of culture.The long tail is the bottom end of the sales power curve which, according to the article, is where outfits like Amazon, Netflix, Rhapsody and iTunes are getting most of their revenue. For Amazon this is books with sales rank of under 130,000.
I might have considered purchasing Tyler’s book if he had been following some of the pricing suggestions in the article, for instance: Cut the Price in half. Now lower it. Sure, they are talking specifically about downloadable content but if you are ranked 1,755,070 following that suggestion just might move you up the rankings a bit and might make you a bit more money.
Update (10/7): Joi Ito has more on this. Also read the comments to his post for why $.99 might be too low, at least for some types of material.