Although these days I’m lucky to find even two hours a week to devote to it, one of my hobbies is playing video games. The fact that I spend so little time on it means that I rarely buy new titles, as there are so many games that came out years ago that I’m still interested in playing, and those can be picked up cheap. Case in point – yesterday I bought a used copy of God of War for the PlayStation, which was the top console title of 2005. Total cost to me: $4 plus tax. Bought new in 2005, it would have cost $50, or $60 in 2015 dollars.
This phenomenon is widespread: consumers pay a hefty premium for novelty. Whiplash, the film that J.K. Simmons won an Oscar for, came out last fall, and would have cost $15 or more to see in the cinema. Today, the cost of renting it from the PlayStation store is $5. Soon you’ll be able to see it on Netflix for $0. (Note that I’m excluding overhead costs here for ease of comparison. Sure, Netflix costs a monthly fee, and buying a PlayStation has an upfront capital cost, but so too does buying a bike or a bus pass to take you to the cinema, etc.)
In a similar fashion, the price of hardcover books > the price of the same book in paperback > the price of the remaindered hardcover. And the same six-issue arc of, say, Amazing Spider-Man will cost $24 plus tax in monthly issues, or $20 for a trade paperback, which is typically more compact and easier to read. In each case, as the novelty of the work fades, so too does its price. I was told once that in the music business, it used to be reversed, and that albums cost less when released and more later on. But that strange artifact has collapsed -along with the entire business model surrounding pre-recorded music – and who knows what will take its place. Something more like the Netflix model, I guess.
But I digress! The point I was driving at was, this morning I got an e-mail alert from Steam, the marketplace where I buy my games for the PC, that a title I’m interested in is on sale. I checked and the price drop was high in relative terms – 33% – but low in absolute terms: from $50 to $33.50. “Pshaw”, I said to myself, “I’ll wait till that drops to below $10”.
Immediately the ghost of Immanuel Kant materialized behind me to ask “What if everyone behaved as you did?” I thought about this. If everyone waited for new games, or indeed new media, to be old and hence cheap, the profit margin on producing new media would drop. As a consequence there’d be less investment in the sector, and many fine works would never be made, because the returns on investment would be such that no one would pay the up-front costs to make these works. In a sense, by waiting for a price drop when the novelty faded, I was free-riding on other consumers. “So,” said Kant. “What you’re doing can’t be universalized as a rule of conduct. It is therefore wrong, and you have a deontological duty to buy media you consume when it is new.”
I didn’t like that conclusion, so I summoned up the ghost of John Stuart Mill. Unfortunately he had no comfort to offer. “By intending to purchase a good, but deliberately delaying your purchase until the price falls to a fraction of the initial price, you save your funds, and in so doing, you provide some utility to yourself,” he said to me. “But you deprive utility to the various firms that rely on purchases at the initial price to sustain themselves. That lost utility far outweighs the utility you keep for yourself, for – ” and he leaned in at this point – “we are both aware that you could easily afford the extra $40 to purchase that good now; the savings provide you little gain; the real utility you preserve is not the money that remains in your pocket, but the feeling of moral rectitude that frugality brings you. Given that the harm you do to others by achieving that feeling outweighs the pleasure you gain from it, what you are doing is wrong, and you have a consequentialist duty to buy media you consume when it is new.”
Luckily, at this point I remembered that I’m neither a deontologist nor a consequentialist, but a virtue theorist. “Aristotle!” I cried. “Save me!” The ghost of Aristotle appeared and said “As a middle-class civil servant living in contemporary Canada, there is a good life to which you are obliged to aspire. The contents of that good life are open to interrogation, but we are both satisfied that being a wise steward of your funds is a part of that good life. Thus, for you, the two vices you must avoid are parsimony and profligacy, and the virtue to which you must aspire is thrift. Buying a game you wish to play when it is expensive would be profligate, but not buying it at all would be parsimonious. Buying it when you can obtain it most cheaply is thrift, and thus is morally obligatory.”
And having been given the answer I wanted to hear, I dismissed the philosophers, deleted the e-mail, and went about my day.