RE: Quality versus Price

[Doug Hensler <Douglas.Hensler@colorado.edu>]

In response to Jon Juneau's discussion of quality and price, I offer the
following rather simple take on things.  Value can be perceived as the
quotient of Quality and Price, V = Q/P.  Consumers make Value judgments
based on Quality and Price.  Price is objective and mostly exogenous to the
consumer's decision (individual consumers and individual suppliers are price
takers in a competitive market), while Quality is subjective and rooted in
expectations, the latter of which suppliers take part in setting.  This is a
fundamentally static perspective avoiding intertemporal issues such as
obsolescence and buyer's remorse.

Doug Hensler
University of Colorado at Boulder