[troydavis]

> Is the fear of arbitrage or people from richer countries buying products in foreign App-Stores the reason this is not done?

No. This isn’t common because most entrepreneurs don’t consider fairness to buyers (by any definition) to be their primary pricing goal. Most price based on value delivered to the buyer (how much better is your app than the buyer’s alternative?), the seller’s costs, or a combination.

Pricing based on perceived fairness to buyers has some practical challenges for sellers, like that the seller’s expenses - particularly team compensation - are not adjusted based on buyers’ locations.

Also, the alternative choices (in economic terms, “substitute products”) are often different across markets - not just different available apps, but completely different ways to accomplish the same task or spend time. There’s no reason to think that buyers in two markets receive the same amount of value from your product.

(Of course, there’s an argument that pricing something differently in certain markets might lead to more total revenue from that market, but that’s that’s optimizing for total revenue, not fairness.)

[eyeswideopen]

Good points! But all in all if a value based pricing approach is taken accepting the default conversions will result in overpriced products, that only fit to the value provided in the baseline country (US).

> Also, the alternative choices (in economic terms, “substitute products”) are often different across markets - not just different available apps, but completely different ways to accomplish the same task or spend time. There’s no reason to think that buyers in two markets receive the same amount of value from your product.

I agree! But is this not the case for an even more fine grained per country pricing than the PPP adjusted one including market/competitor research etc.?

> Pricing based on perceived fairness to buyers has some practical challenges for sellers, like that the seller’s expenses - particularly team compensation - are not adjusted based on buyers’ locations.

If we stick to the example of a digital product in the app-stores the overhead could be considered negligible if no country specific marketing, i18n, etc. is done, right?

All in all i agree, that it poses additional challenges but i still struggle to see, the advantages of the default pricing imposed by the app-stores. Even when optimizing for fairness becomes optimizing for revenue my gut would tell me that the best performing price/value-added from the US would perform better PPP-adjusted than the overpriced alternative. But that is where real world experience from someone around here would be perfect!