Tag Archives: value

The effect of inflation on loyalty schemes

Earlier today, Sainsbury’s supermarkets sent out an email informing people that they were reducing the rate at which they would earn reward points on the Nectar scheme – halving the amount, in fact, from 2 points per pound to one per pound.  They were also removing the bonus points available for reusing carrier bags. Continue reading

Racing to the bottom

How much was the last app you bought on your smartphone?  It’s very likely that the answer to that question is less than a pound, no matter how complex or detailed that app was.  When Apple launched the App Store in 2008, the average price of apps was significantly higher, with games such as Super Monkey Ball selling for £5.99 and Crash Bandicoot Nitro Kart at $12.99.  Over time, the huge competition has led to games dropping prices to 69p, or even free, with new revenue streams being established through advertising or additional purchases.  Along with this fall in pricing, many firms have found that it’s not profitable to spend time developing complex games and applications, leading to a proliferation of match-three and simple physics puzzlers. Continue reading

Is it better to own nothing?

The Guardian reported last year on how fire engines in London had been sold to a private equity firm for £2.  Although fire services grew from private insurance companies, the modern fire service is a clear example of how certain organisations benefit from being owned and run by the government.  There are very large positive externalities from a fire service – they not only stop a building burning, but prevent damage to everything else in the neighbourhood.  People’s willingness to pay for a fire service is much lower than society’s benefit. Continue reading