[hymanroth]

Shirky was talking about micropayments for content in that article. An endless stream of little decisions. I agree with him.

However, as I pointed out in a comment above. The one-off mental transaction cost for agreeing to be micro-billed for a continuous service is less than that required to sign-up for a premium version of a service.

As to my supposed abuse of language, I don't understand what you mean.

[davidmathers]

As to my supposed abuse of language, I don't understand what you mean.

Correct me if I'm misunderstanding you on this part: If your claim is that the paying users of github are subsidizing the free users, that's simply not true and is a misuse of the word subsidize.

Calling a price "artificially high" on the other hand is meaningless. The correct price is the price that create the most value. There's no such thing as an artificially high price in an open marketplace. Or, more specifically, it's impossible for the producer of a good or service to set a price that is artificially high.

[LeBleu]

There's no such thing as an artificially high price in an open marketplace. Or, more specifically, it's impossible for the producer of a good or service to set a price that is artificially high.

That's not true. The real world is not the same as an idealized economic model. It is quite possible for a business to set an artificially high price, at least in the short term. In a competitive market, it results in the business getting less revenue, and quite possibly going out of business, but that is not instantaneous. If the price is merely sub-optimal, but not outrageous, it is quite possible that the overcharging business will make enough money to stay around for years.

Even John Maynard Keynes commented on those trying to profit by shorting irrational bubbles, "Markets can remain irrational longer than you can remain solvent." -- if you're a company benefiting from the current irrationality, that means you can stay around until the market returns to rationality. (For example, see Citibank, Lehman brothers, etc....)

This is without even accounting for the fact that these services are usually not pure commodity markets. They are in monopolistic competition (http://en.wikipedia.org/wiki/Monopolistic_competition), sometimes with only very distant substitutes, giving closer to monopoly control over their market.

[hymanroth]

If you use a service without charge which entails a non-zero cost to produce and supply it, then I'm afraid somebody, somewhere is subsiding it. So that's my first abuse of language sorted.

As to the price of premium services being 'artificially high' - as I make clear in the post - this refers to paying for a benefit that is necessarily incremental (if it wasn't, nobody would use the free service). The price of that benefit is generally excessive when compared to what can be had for nothing.

You many not agree with those words, but I don't think they, too, represent an abuse of language.