The Genius of the Kindle

Fresh off the New York Times this morning is reportage about a startling trend in e-books: they're often more costly than in print.

But the more startling thing is no one saw this coming. Let's go back to Behavioural Econ 101. Items like the Kindle market themselves as investments: you pay a premium up front, but hope to make it up in the long run. This sort of market strategy relies on consumers miscalculating relevant costs. Let's say you honestly do read voraciously. In fact, you buy an average 100 paperbacks for roughly $13 each. When you went and compared the first e-versions marketed with the new Kindle, those averaged $10 instead! Huzzah! A $300/year savings!

Well there's obviously a problem here: no one guaranteed those bargains would stick around. And now? Now you've got a Kindle and a market of overpriced ebooks.

Still, they're not so much more expensive. And the Kindle is handy-dandy, right? Plus, it's oh-so-chic to do your reading on. Voilà, you've got yourself some cognitive dissonance, and you're resolving it through post-purchase rationalisation. You never bought the Kindle for convenience. Or image. Or whatever. It was savings. But you can't let that dissonance fester.

And Kindle knows you won't.