From: ri09+@andrew.cmu.edu (Robert W. Igo)
Newsgroups: comp.sys.ibm.pc.games
Subject: Re: Most Wanted Cracks List
Date: 24 Jul 92 05:32:43 GMT
Article-I.D.: andrew.4eQ0Nvi00WCTM8wm08
	<5608@vexpert.dbai.tuwien.ac.at>
Organization: Sophomore, Math/Computer Science, Carnegie Mellon, Pittsburgh, PA

Excerpts from netnews.comp.sys.ibm.pc.games: 23-Jul-92 Re: Most Wanted
Cracks List Markus Stumptner@vexpert (845)

> From article <54888@mentor.cc.purdue.edu>, by adam@mentor.cc.purdue.edu (Adam):
> > of the game was sold.  The pro-piracy or (pro-sharing) person would say
> > that chances are really high that those three people wouldn't have all bought
> > $40 games all by themselves anyway, so there's no real loss. 

> This is pure sophistry.  It's like saying that chances for a
> Tchernobyl-like nuclear accident are one in a million, and concluding
> that only half a dozen people would "really" be hurt if one happens.
> You can't multiply price by probability, since he pays the whole price
> if he buys it, and he pays nothing if he doesn't.

Ah, but I disagree.  How do you think prices ae determined?  After the
cost of the comapny to produce a product has been calculated, there must
be some way to decide pon the price you and I will pay.  Supply and
Demand are the biggies.  If a company firmly believed that its product
would have a high probability of being bought by everyone, they *could*
decide to make it relatively cheap.  Obviously, this is not always the
case.  If it takes the company next to nothing to produce whatever it is
they make, even a 300% markup or more might not seem expensive.

Have you heard of bean-counters?  Probability experts who work for
places like car companies.  A fictional example of this was in the film,
"Class Action."  A car company produced a product that they knew was
defective.  I won't spoil it for you fully, in case you want to rent it.
 Anyway, the probability of a major accident happening in the car,
multiplied by the maximum expected loss due to lawsuits, for each person
who owned the car, turned out to be significantly less than the cost of
a recall on all their cars.  I'm not saying it was right for them to
think this way, but this is how companies operate.

So, if I am a bean-counter working for a software company, and I'm told
"We want to make $10,000 this year on this game.  How much should we
charge?"  Well, if the bean-counter concluded that absolutely everyone
would buy the game, he'd tell them to charge 1 cent over their cost to
make and ship it.  Obviously, this won't happen.  However, if he
concludes that 100% of the software-buying market for games will buy it,
he could charge a little more than production and shipping costs.  This
is also something that wouldn't happen.  Finally, he calculates the
number of people who will actually purchase the item, figures in how
many of them will pirate it to others, considers the full effect on the
total group of people who buy games, then subtracts the small percentage
of people who will actually buy a copy after having a pirated copy. 
Assuming he has the right number of people who will actually buy it,
he'd figure out what the company should charge.

I'm by far no economist, and I realize that I've glossed over a few
details (like that fact that there will be less people buying the game
at certain prices and more at others, but I'm assuming my bean-counter
example would know to do that.)  No flames, please.

Hey, perhaps I'm totally wrong! :)

[******************************** Bob Igo ********************************]
"Make it sew." --Captain Jean-Luc Picard | "I'm very dangerous when I don't
"It ACTUALLY worked...."                 | know what I'm doing...."
--Colin Baker as Dr. Who                 | --Tom Baker as Dr. Who
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