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Why We Agonize Over Buying $1 Apps

Posted by samzenpus on from the little-things-add-up dept.

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.'"

31 of 523 comments (clear)

  1. SHOULD "Apps" Cost Something? by bky1701 · · Score: 5, Insightful

    As a long-time Linux user, one of the best points is that everything comes without strings attached. I would say "the idea that apps should cost something" is questionable at best, but leave it to Apple and their users to advocate it.

    --
    Great Intellect...
    1. Re:SHOULD "Apps" Cost Something? by Kenja · · Score: 3, Insightful

      I assume that you work for free, since you expect others to do the same.

      --

      "Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
    2. Re:SHOULD "Apps" Cost Something? by bky1701 · · Score: 1, Insightful

      Yet the article complains that people are not giving them compensation, and instead prefer things to be free; so Apple should actually prevent things from being free. Am I the only one seeing a problem here?

      --
      Great Intellect...
    3. Re:SHOULD "Apps" Cost Something? by DJRumpy · · Score: 5, Insightful

      Agreed. I don't think this has anything to do with the cost directly, but rather buyers remorse. There is nothing more irritating than buying something only to find that it sucks not to put too fine a point on it. This does not apply to a cup of coffee, or a coke because you know and expect them to be the same every time you buy them, and they generally are.

      Software is a different animal, and no different than anything else you buy and retain. It is not a common consumable that you know what it will taste like, or feel like. The other issue I believe has to do with choice. People agonize (if that's the proper word or not, as it seems a bit strong to me) over multiple choices where a simple coffee is nearly always the same brand, the same flavor, ect. If people choose the 'wrong' app, and that could have been used to buy the 'right' one, people get irritated.

      I think they over thought this one by a long shot.

    4. Re:SHOULD "Apps" Cost Something? by vlm · · Score: 4, Insightful

      But the developer gets to choose whether their app is free or costs money, not Apple.

      In a free commodity market situation, the developer doesn't get to select the sale price, the buyer has plenty of input, because if the price is too high, no sale. Go ahead, price your house at $10M and see what the sales price turns out to be. It'll be 0 because there will be no sale.

      The app store is not a free market so its pointless to compare it to commodity free markets like coffee shops where there is intense competition for standardized products.

      If the coffee shops were like the itunes app store, you'd pay $1 and most times you'd get a typical coffee but sometimes you'd get only half filled cup, and sometimes it would have a dead mouse floating in it, and sometimes it would turn out to be orange soda instead, but you'd have no real recourse and all you can do is hope it turns out better tomorrow, next time you shop at the world's ONE coffee shop.

      Note that the itunes MUSIC store is a commodity experience unlike the app store, you'll get exactly what you think you're buying 99.9999% of the time plus or minus human error. Ditto the itunes books and movies. Only the apps are a complete crapshoot.

      --
      "Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
    5. Re:SHOULD "Apps" Cost Something? by jeffmeden · · Score: 5, Insightful

      If people choose the 'wrong' app, and that could have been used to buy the 'right' one, people get irritated.

      I think they over thought this one by a long shot.

      That's it in a nutshell. Nothing feels worse than being out $1, AND knowing that you were the dope that pulled the trigger on the wrong thing. Once this happens once or twice you start to get a real aversion toward app purchases in general. If there were a better remediation process than a 15 minute(!) window to claim a refund, or the ability to really stick it to the app dev by one-starring his app (out of 1,237,843 reviews) maybe people would feel more at ease about the purchase.

      The way it is today, you feel like you are at a bazaar and you are being hocked a $10 Rollex; you think to yourself "if this thing breaks even 15 minutes from now I will never see this guy again." Low low prices, nonexistent "Brands", and a lousy return policy all add up to a lousy "marketplace". If Apple (or whoever) wants to turn the tide on the flood of shit apps, they need to find devs who are better at branding, and give them ways to promote themselves. But then again, they are making billions off of people who have no problem plonking down $1 here and there without thinking twice, so why should they even care?

    6. Re:SHOULD "Apps" Cost Something? by Anonymous Coward · · Score: 5, Insightful

      Before you spill ill-conceived hater vitriol, inform yourself to prevent to make you look stupid.

      It's 30%. The developer gets 70% and most devs are quite happy with that. In fact there are devs/companies who moved completely to the App Store. Pixelmator is a shiny example. Previously available as boxed software and download managed by Pixelmator themselves, the graphic editor is now available only through the Mac App Store. It costs now 50% less and Pixelmator makes more money than they ever did. Why? Because it's a massive audience, it's easy and relatively secure, it's fast and you don't have the hassle with billing and handling. The credit card fees are paid by Apple, hosting is done by Apple, billing and accounting is done by Apple, etc. 30% angel share is quite fair, and in fact it is cheap.

      Your reasoning is just rubbish.

    7. Re:SHOULD "Apps" Cost Something? by king+neckbeard · · Score: 4, Insightful

      Creation of food inherently has a significant cost given current technology. If food could be copied as cheaply and efficiently as software, anybody that insists that food should be paid for is an idiot holding us back from having a Star Trek economy.

      The thing that's actually irrational is assuming there should be a fixed cost for something that, practically speaking, costs nothing to reproduce.

      --
      This is my signature. There are many like it, but this one is mine.
    8. Re:SHOULD "Apps" Cost Something? by bky1701 · · Score: 5, Insightful

      It's also a big leap to go and say "volunteering should be illegal because it deprives the people who want to do the job for money."

      --
      Great Intellect...
    9. Re:SHOULD "Apps" Cost Something? by timeOday · · Score: 5, Insightful

      I agree, and it's not just remorse over the $1, it's the time wasted. When you need ONE good app and search results give you 20 hits, what do you do? Spend all weekend playing with 20 apps? Then you ask on a forum and some joker says, "what's wrong with you, I just googled and there are 20 hits!"

    10. Re:SHOULD "Apps" Cost Something? by Eli+Gottlieb · · Score: 4, Insightful

      So could we agree that as capitalism produces enough abundance to slowly abolish scarcity and make many entire professions non-earners in the free marketplace, it also creates unpleasant levels of unemployment? Or, in short, that the increasing inability to earn a living from one of many high-skill professions (software, law, science, general-practice medicine, etc.) is a class contradiction of capitalism?

    11. Re:SHOULD "Apps" Cost Something? by green1 · · Score: 4, Insightful

      Actually, I do work for free, I volunteer hundreds to thousands of hours a year to various causes and am quite happy to do so.

      Why should software developers never do the same?

      I understand that software developers should be allowed to ask money for their work. However the article implies we should prohibit others from volunteering their time to protect those unwilling to do so. I disagree. I should not be prohibited from volunteering my time just to protect someone who is unwilling to do the same.

    12. Re:SHOULD "Apps" Cost Something? by ski9826 · · Score: 3, Insightful

      I just read this article and it appears that the point of it is that we shouldn't balk over paying a buck for an app (can be used many times) when we are willing to pay up to 4 bucks for a coffee (a 1 time use item).

    13. Re:SHOULD "Apps" Cost Something? by iamhassi · · Score: 5, Insightful

      The way it is today, you feel like you are at a bazaar and you are being hocked a $10 Rollex; you think to yourself "if this thing breaks even 15 minutes from now I will never see this guy again."

      ^----------- THIS. That's why apps live and die by their rating: I won't even bother downloading a FREE app if the rating is 2-stars or less.

      This is also why I'd rather buy on eBay than Craigslist. Even though Craigslist means I get to go physically touch the item I'm purchasing, if it breaks 5 minutes after leaving then I'm out of luck. At least eBay I have feedback and Paypal that *might* support me.

      I have a pretty good idea what my carmel latte will taste like. Movie previews are usually an accurate portrayal of what the movie will be like. I bought a used iPod Touch for $100 before being locked into a iPhone contract so I could see what the big deal was. But I've downloaded some truly horrible apps. Awful, disgusting, WTF apps. Apps I used for a minute and thought "Oh no! This isn't even close to the description!" It's the app equivalent of being rickrolled, and who likes to be rickrolled? Even though it takes only seconds out of your life, no one likes to think they were getting X and they're given Y instead. It comes down to this: no one likes to feel deceived. Lattes don't deceive. Movie previews don't deceive. iPhones/iPads don't deceive. App descriptions sometimes deceive and we don't like it.

      I wish the blog post would have mentioned the author's credentials. If anyone else is wondering "Why should we listen to this maniac?" according to his About page he's "Professor of Psychology and Behavioral Economics at Duke University"

      --
      my karma will be here long after I'm gone
    14. Re:SHOULD "Apps" Cost Something? by mlts · · Score: 5, Insightful

      App stores/repos take a lot of work that a developer would have to do:

      1: No dealing with DRM. No activation infrastructure, no CD keys to make and have cracked. At worst, you make a couple calls to LVL if on Android to check the license. This saves headaches and bad PR.

      2: No need to have a download and patch infrastructure. Just upload patched versions to the market/store/repo, and let them deal with making sure the bandwidth to the end user is adequate.

      3: No dealing with credit cards and that type of crap. Same with billing.

      4: Relatively easy to have different editions of products. On iOS, one would have different apps, on Android, one app that is free, and a purchased license key.

      5: Piracy isn't your problem. Both iOS and Android deal with piracy in different ways. Android's method can said to be better because you can patch your app every week or so, forcing it to have to be re-cracked and the LVL calls stripped in order for it to be usable by nonlicensed users. Even if the patch is just upping the version and running the code through an obfuscator, it will force it to be manually cracked, uploaded, and re-downloaded by IP infringers.

      6: In-app purchases are easy to do.

      7: No physical packaging needed. It makes advertising easy -- tell people to visit your website or the store/market/repo to grab your product.

      8: You just found a nasty security hole? Push out an update. No having to E-mail every user to tell them to download a new copy and manually install this. Better PR.

    15. Re:SHOULD "Apps" Cost Something? by thegarbz · · Score: 5, Insightful

      That's why apps live and die by their rating: I won't even bother downloading a FREE app if the rating is 2-stars or less.

      Obligatory lesson on app ratings

      Ultimately the 5 star rating system are useless. When a new version comes out an app retains all their previous ratings are kept. One would argue as they should, but then there have been cases of app creators doing a dirty and with an update changing permissions to read out data in the phone and spy on the users. If you're one of the first people to update it then there's no indication of this. Neither would there be an indication using the 2-stars or less system.

      People tend to have centre point bias when asked personal questions, yet tend to bias to extremes when asked about experiences. If an app doesn't have more than 4 stars there's likely something very wrong with the app. Your typical "good" app, and in this sense good doesn't mean great, it simply means that it does what it says and works, would have something like >70% 5 stars. >90% >4 stars, and then a few 3 2 and 1 star posts from people who were too dumb to get it working, didn't read the description, or have it crash on their devices.

      Clear signs of trouble on the other hand are apps with lots of 5 star ratings, a good percentage of 1 star ratings and nothing in between. This is an indicator that the most recent update has really screwed something over.

      As always, the 1 star ratings are the ones we should be reading. They highlight the problems. Ebay buying should be done the same way. When I see a seller on ebay I check his reviews, I filter them by bad reviews and I see what kind of problems people have to judge if these are the kinds of issues I'm likely to face. Recently I found someone with a 98% positive review rate, filtering by negatives showed the sellers unwillingness to replace broken goods. So straight away I wouldn't have bought anything fragile off him despite his 98% score.

      Stars are over simplified.

  2. What does apple have to do with this? by h4rr4r · · Score: 4, Insightful

    Free software has been around a lot longer than that. Even OSX and iOS are based on it.

  3. eh by jaymz666 · · Score: 4, Insightful

    I agonise over paying for apps, thus locking me in to a platform even more with each successive purchase.

  4. No recourse for bad apps by superpete · · Score: 5, Insightful

    Perhaps it's because there is no recourse for me as a consumer if the app just doesn't work. At least with that $4 coffee I can send it back if it's bad, can't do that with an app.

    1. Re:No recourse for bad apps by rickb928 · · Score: 5, Insightful

      But lots of people agonized over their *first* latte. When they tasted it, and it was good, they were over the price very quickly.

      $1 apps are a risk. If it's no good, you've spent a buck for nothing, not even a lousy cup of coffee. If it's hohum, you'll probably use it, but the equation is $1certainty. In fact, a $1 app is something you either expect to suck, or will be surprised at how good it is. And since most apps suck (they do, get over it), you're rolling the dice. And you don't have winning odds.

      Now if most apps were $1, then we could get into the habit of springing for an app at a dollar, and usually getting something useful.

      But most apps suck. Even free is a loss, you've lost your time finding it, 'buying' it, and trying it out. 'Free' isn't even free.

      There's an economic theory that shows kids will take a sure thing rather than the apparently better deal that is not so obvious. This persists into adulthood.

      --
      deleting the extra space after periods so i can stay relevant, yeah.
  5. Why? by 140Mandak262Jamuna · · Score: 3, Insightful

    why the thought of paying even $1 for an app turns into an agonizing decision for those perfectly willing to spend $4 on coffee,

    The answer is simple, isn't it? The seller is not making just one mug of coffee and keep selling clones of it at 4$ a mug. Would you really pay 4$ for a copy of a mug of coffee? Though we all know apps are created by labor and capital investment, though we know that app is as much a product as a mug of coffee is a product, though many of us actually make a living writing code, we still balk because we also know the cost of replication is zero. We should not think that way, but we do.

    --
    sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
  6. Users want a trial ... by perpenso · · Score: 3, Insightful

    Users want a trial which is why I offer a free app, Perpenso Calc for iPhone RPN, 5 modes: Scientific Stats Business Hex Bill, which is upgradable to full (RPN, tape, etc) via in app purchase.

    Users may also want customization so I offer the more specialized functionality (statistics, business, hex, etc) as in app purchases. So rather than a higher priced app with everything included I can keep the price down and let users only pay for the specific functionality they want.

  7. Even FSF is OK with software costing something by perpenso · · Score: 1, Insightful

    As a long-time Linux user, one of the best points is that everything comes without strings attached. I would say "the idea that apps should cost something" is questionable at best, but leave it to Apple and their users to advocate it.

    Why just Apple? Even the FSF is OK with software costing something. The GPL allows for charging for the binary. The GPL even allows for charging a nominal fee for delivering the source code to the user.

    Imagine someone releasing a GPL'd program for Mac OS X and then only distributing the source as a $1 Mac Store app download. That might be GPL compliant. This might spur RMS to get to work on GPL v4. :-)

  8. Re:Considering that... by Anonymous Coward · · Score: 5, Insightful

    I actually develop and write software. I would pay $1000/yr to continue using software like Debian.

    Frankly, you can download and use Debian for free because of charity of others. Because others said "we care more about feedback than leeches".

    When you pay money for software, you give someone reason to continue to work on it. Or to work on new software. If you do not pay (like most of OSS), then you better be able to maintain your own mission critical software as there is absolutely no motivation for the maintainer or developer to continue to support you.

    Things like Linux are not free-beer. Lots of people/companies pay lots of money to continue development of Linux. Without those sponsors, Linux would be where HURD is today.

  9. First copies are scarce by tepples · · Score: 5, Insightful

    Subsequent copies of computer programs are non-scarce, I'll grant. But without a first copy there are no subsequent copies, and first copies of computer programs are scarce. The typical publishing model to recover the cost of making this first copy involves spreading its cost across subsequent copies.

  10. You can take back crappy coffee by sl4shd0rk · · Score: 3, Insightful

    I've not found the same return policy on software.

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    Join the Slashcott! Feb 10 thru Feb 17!
  11. Re:The app store has over 500000 apps by BasilBrush · · Score: 5, Insightful

    Why would you pay?

    You can get unlimited water in the river or falling out of the sky. Why would you pay for a beverage to quench your thirst?

  12. Not always a free market by tepples · · Score: 5, Insightful

    If you think I'm not adding enough value for what I charge - that's fine, you're welcome to not use what I'm making (free market, etc).

    Say I think your product is overpriced for what it does, and I make my own alternative product that's cheaper or free. To keep people from choosing my product over yours in a free market, you sue me on dubious grounds involving some sort of claimed infringement, on the basis that a settlement is cheaper than a competent legal defense. Is it still a free market?

    1. Re:Not always a free market by tepples · · Score: 5, Insightful

      Because this has already happened on multiple mobile app stores, and it represents a kink in Firehed's "free market" theory. Someone made a video game "T", someone else made a video game "M" using the same rules as "T" but original code and graphics, and the publisher of "T" filed a takedown on grounds that the copyright in "T" extends to the game's method of play. Despite that this is legally unsupported under U.S. law, the developer of "M" just accepted the takedown because it was cheaper than contesting it and running the risk of having to pay a lawyer to handle a legal defense.

  13. $1 app vs. ad-supported $0 app by tepples · · Score: 4, Insightful

    Google Search is ad-supported. People agonize over buying a $1 app because it could have been an ad-supported $0 app.

  14. Re:Why $4 for a latte? by Belial6 · · Score: 4, Insightful

    The whole comparison is backwards. The fact that people 'agonize' over a $1 app isn't the odd thing. The fact that they don't over a $4 latte is the dysfunctional behavior. Many people who definitly cannot afford it are spending enough on lattes that they could afford to buy a brand new car if they would just redirect the funds. I 'agonize' over the $1 app because I am fully aware of the 'nickle and dimeing' system that they are working in. The point of the $1 app is to separate you from your money in small enough increments that you don't notice how much you are spending.