Book Reviews: “Cheap” and “Free”

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Shell, Ellen Ruppel. Cheap : the high cost of discount culture. Penguin, 2009.

Anderson, Chris. Free : the future of a radical price. Hyperion, 2009.

An outlet mall in Philadephia rings in four times as many visitors as the Liberty Bell. Colonial Williamsburg can’t hold a candle to the Potomac Mill outlet mall. So writes author Ellen Ruppel Shell in the book Cheap. Outlet malls are located 25 to 100 miles from a metropolitan area as a deliberate strategy. Not only is the land inexpensive, but the inconvenient location connotes cheap and America has a love affair with cheap.

Ruppel Shell covers a wide range of topics, including the history of bargains and markdowns, the effects of discounting on durability and craftsmanship and the psychology of discount decision making for the shopper. The hunt for bargain prices has led to a host of problems, including an unsafe food supply, global poverty and environmental devastation. Consumers have paid a high price for cheap goods.

So how low could prices go? In Free, author Chris Anderson makes the case that in an online economy, the cost of distribution is driving toward zero. Businesses have become more profitable by giving things away than they can by charging for them. A free price is a business strategy that is essential to the company’s survival. Google is the best example of a profitable company whose product is free.

As in Cheap, the book Free begins with a history of pricing and includes a discussion of the psychology of consumer decision making, with a focus on the free environment. Author Anderson also explains free as a business model and shows how companies compete when competitors products are free.

Both of these books offer thought-provoking and entertaining views on the global economy. Fuqua professor Dan Ariely is quoted several times in both books.

© Reviewer: Meg Trauner & Ford Library – Fuqua School of Business.
All rights reserved.

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