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Why We Agonize Over Buying $1 Apps
theodp writes "When it comes to explaining decision making and behavioral economics, Dan Ariely is the man. In his latest blog post, Ariely tackles the irrationality of app buying, explaining why the thought of paying even $1 for an app turns into an agonizing decision for those perfectly willing to spend $4 on coffee, or $500 on devices that they arguably don't really need. Had Apple created a really low minimum price for apps — say $0.15 — instead of offering free apps on day one, Ariely suggests, we would be anchored to the idea that apps should cost something. 'Then paying more (maybe even $2) for an app would be a simpler step,' he concludes, 'maybe one that we could take as easily as paying $4 for a latte.'"
The money breakdown on a hypothetical $1 app purchase is:
Developer: 70c
Credit-card company: 16c
Apple: 13c
Storage/network costs: 1c
http://www.businessinsider.com/chart-of-the-day-cost-of-an-app-2011-7