following up on the newness premium perhaps new books should follow the lease-to-own model of new cars…a monthly payments for X number of months after which the owner can make a lump sum payment and keep the vehicle or walk away from it and it returns to the used car pool.

After awhile, some of those buyers may decide to turn around and sell their copies. If you watch the prices of books on sites like half.com you will see that the first few copies offered for sale tend to be close to the original price (60-90% of the price). Of course these sellers are practically constrained by the price of buying a new copy and they will have a very hard time selling a used book for more than this price. Buyers looking for a little savings during this period may opt to buy a used copy, but since there tend to be few used copies available there may be some work involved in finding a copy and the savings will be marginal. Many may decide to take the “easy” route and pay the premium for the new copy.

After the book has been in print for a significant amount of time, there may be a lot of used copies available for sale and the used price will reflect this. Typically, a mass market used book that has been out for a year or more will cost about 25-50% of the new price (in my completely unscientific estimation). Buyers may be very tempted to get a used copy in this situation, but there are still some circumstances in which a new copy is preferable (professional use, a gift, etc). Also it may take more effort (used book store) or risk (online purchase of a used book) to purchase used and so some buyers may still opt to buy new.

Finally, after a book has been out of print for awhile the price of the used copies are no longer constrained by the price of a new copy. For books in demand, the price may now exceed the original price.

Just my take. And great job on the blog! Keep up the good work!

But otherwise, I see what you’re saying. Demand saturates. Hmmm. Consumers consume and leave the marketplace. And books are not like cars or homes, where demand never really goes away. Which is to say, people are prepared to “trade up” (or down) in both these categories, so they are, depending on their ability to pay and the state of the marketplace, always “in the market.” Which is to say, they are prepared to forsake their state of saturation.

Once you own a book, you are out of the market.

And this is where improvement comes in, isn’t it. We may own a PDA but we don’t own the latest PDA and this is sometimes enough to bring us back into the market. The authors of book, to flourish in their own academic economies, have to write new books, so they are never renewing demand, undoing saturation, by renewing old ones.

On the trade off (incremental profit loss from a stockout is greater than the incremental cost of an extra copy) performed by publishers, I wonder when the print on demand world will get so efficient that the publishing world will be able to “pull a Dell” and not print a book until it has a customer for it. I suppose an electronic option will catch up to us before this happens and the “printing” process will disappear.

Thanks and forgive these reflections as the anthropologist “writes out loud.”

Newness is also likely to be an issue for certain books, especially topical books, technical books in dynamic fields, or faddish books that people read so that they can speak about them with others. But I believe the move down the demand curve is more likely to be the reason for lower used prices in general.