Wednesday, June 2, 2010

Free Goods, Pricing

One need not be a landlord to realize that offering free goods and services often leads to "tenancy risks" of one kind or another. This goes back to Oliver Williamson's basic notions of economic realism: "Opportunism" and "Bounded Rationality".

So, it is no surprise when AT&T finally pulled the plug on a free service that was actually being used by a significant, albeit small minority, to its promised limits. It stopped offering unlimited data plans for it mobile subscribers.