Kindle Price Falls

Both J and Kottke report the $40 drop on Amazon's Kindle. Kottke thinks sales aren't so good, which is possible:

That can't be a good sign, especially since, as Jason noted, the Kindle just recently came back into stock on Amazon.

Not that I want to be like the kid with a hammer to whom everything seems like a nail, but maybe this is just price discrimination. Early adopters have a higher willingness to pay, and so it's rational for monopolistic producers to try and segment the market and charge different prices based on those differences in demand. One easy way to do it is to release the good in stages with incrementally lower prices, and those with the highest discount rate in terms of needing the product sooner than later will pay the higher price, whereas those more patient and/or with a lower willingness to pay will wait. Win-win-win as Michael Scott would say.

Of course, it's also entirely possible that sales are slow, and really, sluggish sales are consistent with price discrimination, since it'd seem like the producer would realize he's extracting all the producer surplus he can from a price point when sales flatten. But, I think Jason's point is more that it's pretty soon to already be lowering the price, given how recently the Kindle rolled out and given that they just restocked the shelves.