Compendium of Christian Theology on Community Pricing

RonaldQuick said:

Just wanted to let people know there is a new resource on Community Pricing.

Already on it!  Hope it moves.

I bid $20

I'm bidding for this too, but I don't really understand the logic of placing a higher bid rather than a lower bid. For example, right now, $10, $12 and $14 are pretty much even so why bid for $20 (or even $14) rather than $10?

Joe Miller said:

I hope more folks will also bid on the Charles Finney collection.

I'm not seeing that on the Community Pricing page... ?

Hi John

   It is my understanding that a bid of 20 dollars would increase the graph from 1 dollar to 20 dollars.  If I am correct?

You've misunderstood my point. I guess it's more of a question. Is Logos averaging the bids or are they keeping them separate. For example, say there is an item that will cost $100 to produce. Three people bid $25 and one person bids $50. Does this mean that Logos would send the item into production at $43.75? Or does this mean that you either need one more person to bid $25 or one more person to bid $50?

If it isn't averaged then I'm not doing anyone any favors by bidding $50, in fact I'm hurting the bidding pool. If it is averaged, then I'm still not necessarily helping those who only wanted to bid $25. So it seems smart to just bid lower and see how other bids start coming in (if the item is new or doesn't have a lot of bids) or to bid on whichever price has the most support. If there are a lot of bids at $10 and none at $50, why would I bid $50?

JackCaviness said:

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John Bowling said:

For example, say there is an item that will cost $100 to produce. Three people bid $25 and one person bids $50. Does this mean that Logos would send the item into production at $43.75? Or does this mean that you either need one more person to bid $25 or one more person to bid $50?

The latter is true. If you bid $50, then it is logical to assume that you would also be willing to pay any price up to and including $50. Thus, in your example, you have placed one bid for $50 or one bid for $25, or one bid for $30, etc. To continue your example, if 10 people each bid $50, the product would the move to Pre-Pub with your order for the product at $10.

To continue the example farther, if you only bid $10 and Jack and I bid $30 and three people bid $20 the book would go into production for $20. 5 bids of $20 or more equal $100. Unless you raise your bid during that last week or four more people bid $10 or more, you will not get the book at the community pricing discount.

This means you should always bid the MAXIMUM you are willing to pay on your very first bid. There is no risk to you missing the lowest price, because regardless of how high your bid you are alway guaranteed the lowest price. However, if you are biding less than you are willing to pay you are risking not getting the resource and your are also not helping the resource get into production as quickly as it might.

What has historically happened is many people during that last week raise ridiculously low bids. If only these people had bid at a more realistic level in the first place the resource might have gone into production sooner. I am afraid this is what has happened with Barnes Notes.

If what I've said is correct (and neither of you have denied that it is), then this is inaccurate.

Think about how bidding is conducted in an auction. Do people bid the maximum they are willing to pay on their very first bid? No, that would be absurd. No one gets as good a deal as they could if they go all out on every item. 

I realize, Keith, that what you're saying is in line with the Logos blog on "A Bidding Strategy for Community Pricing," but I think it's mistaken or bad advise.

P. Keith Larson said:

Unless you raise your bid during that last week or four more people bid $10 or more, you will not get the book at the community pricing discount.

Exactly, so the person should watch the item closely and move it up if he needs to.

P. Keith Larson said:

This means you should always bid the MAXIMUM you are willing to pay on your very first bid.

I strongly disagree that this is the conclusion to draw from your scenario. The smart conclusion, I think, is that you should keep a close eye on the Community Pricing board (they also send out emails). If everyone bids the maximum they are willing to pay then you are guaranteed to pay the highest MARKET price for any item! Is that a good deal? No. 

So no one is doing themselves or the other bidders any favors by bidding the maximum price they are willing to pay. If everyone worked under the same logic then the very point of the Community Pricing board is, well... pointless (assuming Logos publishes all their resources roughly at the highest market value).

P. Keith Larson said: There is no risk to you missing the lowest price, because regardless of how high your bid you are alway guaranteed the lowest price.

This statement is deceiving (though not intentionally) because "lowest price" in your scenario is actually the highest market price since everyone bid the maximum value. When people think of "lowest price" when they are shopping for a bargain they usually think below the market value or, at the very least, below the highest market value. So in any other scenario I think we would correctly say that your statement is false, and it seems to be false in this scenario too.

P. Keith Larson said:

However, if you are biding less than you are willing to pay you are risking not getting the resource and your are also not helping the resource get into production as quickly as it might.

That's how auctions work. In fact, that's how all of capitalism works. Investments and transactions are risky. If I go to Best Buy (the electronic store) and see a T.V. for $500 it would be risky for me to go home and check around to see if I could get a better deal. By the time I find out, the sale may be over or the item may be sold out. But to just assume that $500 is the "lowest price" is entirely unreasonable. On the Logos Community Pricing board that risk is reduced because they notify you of when your bid is too low or you can simply check yourself. So it's not a great risk, unless you plan on ignoring an item that you bid on for over a week. The other option you are promoting puts everyone at risk of paying the highest market price for an item, in fact it guarantees it. 

As far as "into production as quickly as it might," I'm willing to wait an extra few months to pay $7 for an item rather than $20. That's over 50% "discount."  I think most people are willing to do the same (as evidenced by Black Friday).

Maybe I'm thinking about the whole thing wrong, if so I would like to know. That's why I asked the question. But it still seems to me that the "Bidding Strategy for Community Pricing" blog (that apparently many people have adopted) is wrong and needs to be changed. Of course, that assumes that your bidding strategy is to pay the lowest possible price (which could never be achieved by bid your maximum!). 

[Edit: In fact maybe I should go post this as a comment under that blog so more people don't get misled]

Ted Hans said:

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John Bowling said:

P. Keith Larson said:

Unless you raise your bid during that last week or four more people bid $10 or more, you will not get the book at the community pricing discount.

 

Exactly, so the person should watch the item closely and move it up if he needs to.

That is what i do. After a while one can safely predict what a product on community pricing will end up costing. One just has to watch the graph and adjust ones bid.

This can work for adjusting one's bid downward, too. Sometimes it helps to get momentum going if you bid a bit higher than you'd ultimately hope to pay (even though you might be willing). More people tend to come on board once something reaches 80% because they fear if they don't hurry up they might miss the deal altogether.

Kevin Becker said:

My understanding of Community Pricing is that it covers the costs to produce a title. period. Logos only makes a profit on sales after Community Pricing produces a title

I was taking this into account (cf. my earlier post).

Kevin Becker said:

So, if everyone bids $40 it doesn't necessarily mean that the book will cost $40. Say it takes $1000 dollars to cover production costs of a title. If 100 people bid $40 dollars the final price should be $10 dollars.

If this is the case it may be better (or more accurate?) if Logos gave us an estimate of the production costs and a graph that represents the number of people willing to participate rather than (or in addition to) the amount of money they are willing to bid (since that would turn out to be virtually irrelevant in such scenarios). Let's say 49 people bid $20 dollars on the current layout and then 50 other people see that there is a lot of support for $20, but aren't willing to pay that. If they knew that their contribution would actually mean they only have to pay $10 then they would probably participate. 

John Bowling said:

If this is the case it may be better (or more accurate?) if Logos gave us an estimate of the production costs and a graph that represents the number of people willing to participate rather than (or in addition to) the amount of money they are willing to bid (since that would turn out to be virtually irrelevant in such scenarios). Let's say 49 people bid $20 dollars on the current layout and then 50 other people see that there is a lot of support for $20, but aren't willing to pay that. If they knew that their contribution would actually mean they only have to pay $10 then they would probably participate. 

I'd further point out that I think low bidding is still a good idea in this scenario. Assuming an item costs $100 to produce, what if two people almost immediately bid $50 because they are so crazy about the product? Then the "bidding" will be closed quickly (maybe within a week or two) and, if no one else notices the item, then they pay $50 whereas if they had bid lower and allowed the item to gather more interest and come to more people's attention they could have paid less.

So even from this angle it seems better to initially bid lower rather than higher.

Over several years, I've seen this discussion come up so many times that I wonder.... If there's someone who feels passionately enough about community pricing to write up the logic, put it out  on the wiki in its own page, perhaps under FAQs. Then we can refer questions to that page rather than rehash the same material.

I'm just sayin'... [:)] [;)]

MJ. Smith said:

Let's apply a little logic here There are at least three possible goals in bidding:

1. To purchase the product at the lowest possible cost [bid low]
2. To receive the product as quickly as possible [bid high]
3. To minimize the risk that production of this products slows a product you prefer [don't bid]

It reads to me as if you are both right - you're simply working towards different end positions.

Okay - have at it. Who is being the most illogical?

The Logos Community Pricing page states, and I quote, "The Community Pricing program is all about getting more books onto your computer at the cheapest price possible." In light of that, my statements are the most logical ends towards achieving the purpose to which Logos has started the Community Pricing program.

[Further, even if one has goal (2) that may not be achieved by placing a higher bid. I've already described a scenario in which higher bids could drive away potential participants and, thus, delay the production of the item.]

JackCaviness said:

People following your plan has kept Barnes Notes in Community Pricing for years.

I beg to differ.  The reason I haven't (and won't) bid on Barnes notes it two-fold:

1. It is available for free in other software.

2. More importantly, it was available as a PBB in L3, and eventually will be in L4.

I don't want to pay for something I can get for free.  Though it won't be 'tagged' as extensively as if Logos had created it, I don't need it to be...I'll just read it as a commentary (none of my print commentaries are tagged.  Come to think of it, I don't think any of my print books are tagged, yet they do the trick [;)] ).  I would rather use that money for some other resource that 'tickles my fancy'.

MJ. Smith said:

The potential flaw in your logic is assuming that the "market price" set in the community forum is the same as the "market price" when it is out of community pricing. If you are to compare time vs. money which is what the tradeoff is, do you compare only against the price as it comes out of community pricing?

Well you have to take it in context. In my post the "market" is all of those bidding and, thus, the price you're paying is the highest market price if everyone bids the maximum.

When Logos moves the item to pre-pub they, Logos, may raise the price. Does this reflect a different market with a new market price? That's a little harder to answer. Eventually, only time will tell if Logos is selling the pre-pub at market price since that can only be determined by whether or not consumers are willing to pay for it at that price. It may in fact be that they are over pricing it, and if a lot of people are bidding and are bidding at their maximum value then we have some good reason to say they are over pricing it. [Edit: we might also take note of the fact that some pre-pubs have been "gathering interest" for a long long time. Is that because no one is interested or because the Logos price doesn't reflect the market price??]

Of course, one also has to take into consideration that under different circumstances persons may be willing to pay different amounts. Often, their willingness to pay such and such may be entirely irrational. In experimental psychology we ran an experiment studying what's called the "anchoring effect." The results, which have been confirmed numerous times and in other areas besides weight, are that person's judgments can be effected or shifted by introducing a new range of items (psychological or physical). (So, for example, if Logos puts a new price tag on an item and says "you save such and such" then this can serve as an artificial anchor for people.)

MJ. Smith said:

Let's apply a little logic here  There are at least three possible goals in bidding:

1. To purchase the product at the lowest possible cost [bid low]
2. To receive the product as quickly as possible [bid high]
3. To minimize the risk that production of this products slows a product you prefer [don't bid]

It seems to me that there is one more option - the one that I apply.  Bid what the product is worth to me.  Somethings are not worth (to me) adding to my library and I don't bid.  Other works are worth more, multi-volume works even more.  I will generally start at $20 per volume with a cap of $100.  I then ask myself, "Is this really worth this much to me?"  And adjust my bid by whatever the answer.  Sometimes up, sometimes down, and sometimes I will not bid.

I will also periodically review my bids - to balance them against my current bank account and against the current bidding history.  And, again, bids may go up or down depending on these factors.

I have found, using this strategy, that most items finally go into production for less than I what I bid.  Occasionally, I  to ask myself if the product is worth the higher final price to me.  Sometimes, I say yes; sometimes, I say no.  In the latter case, I am willing to walk away.  And sometimes, the final price goes down even further.

Just my personal strategy -

Yours because His,

 Floyd

Bob Pritchett said:

The information is embedded in the graph, though without the specifics. The 100% line represents the production costs, and the curve with points reflects the actual revenue generated if we sold the book at that price. So if you see that both $10 and $20 are at exactly 50%, you know that there are exactly twice as many $10 bids as $20.

We could show the actual numbers, or even add the number of bids as a column behind each price, but we didn't want to clutter and confuse things, and we don't want to expose actual units and costs. (It's not that we're secretive, it's that when we reveal actual numbers we tend to get into emotional arguments about why people are amazed something costs so much, or how someone else could process it cheaper, or why don't we all just OCR the book as a collaborative effort, etc.)

I believe the smart strategy is to bid your true, highest bid up front. Yes, if two people bid $50 on a $100 project, it would go out at $50, when maybe it could have been less. But that's why we only process bids on Fridays after it crossed the line by Wednesday -- to ensure there's time for enough people to see and bid. 

If everyone bid their high bid the week we put it live, in theory every community priced title that was going to make it would do so in the first week, at the best price. (Nobody is punished for bidding high -- the more people that come in, the lower the price, even if we would theoretically make more at the higher price. Our promise with CPP is that we'll sell it at the LOWEST price that covers costs.)

The bid adjusting waiting game may theoretically protect the player and save a couple bucks, but when everyone does it the project is delayed -- possibly forever -- and everyone loses the game.

I think game theory and pricing are fascinating areas, and we're always looking for new ways to experiment in this area.

Thanks, as always, for your input. I understand the need for a withholding certain specifics as a business to avoid those emotional arguments about true costs. Publishing is a lot more labor-intensive than most people realize; my wife is a copy editor for an academic publisher so I've had a taste of how many labor-hours it takes to get a project out the door.

I just wish there was a way that Logos could communicate "round up 10 more people at this price and it goes into production. The issue (as I see it) with Community pricing is that it generally involves low-priority books (public domain works with potentially more current offerings available elswhere) with no means to predict timing. It's a low risk way for Logos to build its catalog but it seems to lack that extra something to hold user interest.