Hal Varian: prediction

Transcript context

…But if someone says that, well, the equilibrium is a kind of market segmentation, where the ready searchers get it very cheaply or for free. The other people are elastic. If Amazon is perfectly price-discriminating against us, do we end up with the same situation? Is it like the journal articles? Or is it, somehow, we all search and Amazon’s price discrimination breaks down altogether? Well, I would say — if we take the journal example again — as we all know, where we’re going to get the price reductions is competition. And you’ve probably seen that in the last couple of years, the American Economics Association has offered four new journals. You’ve got a bigger set of publishing outcomes. There’s a high level of prestige attached to these journals, and they’re very reasonably priced. I think we are seeing entry of that sort, not only in economics, but in other scholarly disciplines as well. Why are textbooks still priced so high? Not all textbooks, but many.…

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