What I like about the article is the interaction among sophisticated
consumers, myopic consumers, and vendors: sophisticated consumers are
subsidized by the profit that vendors make from myopic consumers. For
example, credit card companies offer no annual fee credit cards, which
give sophisticated consumers free credit because myopic consumers foot
the bill with late fees and interest charges.
It reminds me of a New York Times article from a couple of years ago: "
It Adds Up (and Up, and Up)".
The "Adds Up" article discusses how information services vendors break
up costs into lots of small charges to make it difficult for consumers
to see the Total Cost of Ownership.
The nice IT implication is that the
TCO for a product or service will depend very much on whether the ITO
is a sophisticated consumer or a myopic one.
