The price of a 3G iPhone – one more point

Agnitio discussed a number of the important points surrounding the price of the 3G iPhone that is coming to Australia. If you are one of them you might want to also hire one of these phone plan deals.

For goodness sake, it is a discretionary item.  If Apple and Vodafone want to charge a whole lot of money for the thing and you still buy it, you must value it enough to pay that amount of money.  People have no implicit right to an iPhone, it is not one of the “necessities of life” that a proper society may wish to provide to all its citizens, as a result whining about the price is just plain irritating.

Some people may say, “hey, it is a monopoly, it is charging to much and selling to little compared to the socially optimal level”.  My counter would be “if they hadn’t created the product in the first place, then no value would be created, so calm down”.  Hell, the reason these companies invest in creating the product is so that they can extract some surplus at some point – just be glad that this overall transaction creates value for everyone involved!

So instead of moaning about the asymmetric bargaining position, just realise that since there exists a market and since the trade is voluntary, everyone is still better off when the iPhone is avaliable than when it is not – creating and releasing the danged thing at this price is pareto superior (*) to not doing so.

Seriously, is there nothing more important to discuss on TV than the price of the iPhone!  I would have thought that society is more concerned about the fact that we are in a recession, and there is the potential for large scale job losses.

3 replies
  1. Eric Crampton
    Eric Crampton says:

    Just wait… if Apple does here what it did in the States and dropped the price after a few months — the moaning of the folks who bought early was hilarious. ‘Twas one of the few times that Cowen was roused from his general mushiness and smacked people around a bit.

    Stop whining

    OK, people, it’s no more Mr. Nice Guy. I’m fed up! No more moderation, no more namby-pamby conciliations to those I disagree with, at least not today. I am plain, hopping mad. And who has pushed me over the edge?…

    iPhone early adopters. (I’m one of them, though a virtuous one.) You may have heard, they just cut the price on iPhones. Get this:

    “I just felt so used as a consumer,” he said. “They hyped up the iPhone for six months and built up our expectations, and then they grabbed our extra $200 and ran.”

    Here is another guy:

    “I feel totally screwed,” wrote one iPhone owner on the Unofficial Apple Weblog site. “My love affair with Apple is officially over.”

    It is you people, you who resent Coase (1972), you people who induce wage and price stickiness and widen the Okun gap. You people, who don’t know what it means to sit back and enjoy your consumer surplus. You beasts!

    And to think you are all carrying around these wonderful icons of modernity in your pockets…


    (I thank a loyal MR reader for the pointer. Please note this post was published from my iPhone.)

  2. Matt Nolan
    Matt Nolan says:

    Indeed – I suspect that consumer get some innate satisfaction from complaining. It must have something to do with the anglo-saxon nature of society in New Zealand 🙂

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