Last Monday the University Bookstore had a sale in which the prices of almost everything were 25 percent lower. There were some things that were not included in the sale. Art supplies and half priced books were affected, because before the sale their prices were already cut. For example, before the sale, painting canvasses were already 50 percent off. If the sale applied to canvasses then their prices drop even further.
However, there is another major category of items, which were not included in the sale: textbooks. Why were textbooks not included? It could not be because they are books due to the new general, non-half priced books being included in the sale. Therefore, there must be something different about textbooks.
On the day of the sale, I bought pens although my current pens were still good, but I did still have an underlying need for pens, if not now, then for the future. Thus, the lowered prices had, in effect, empowered my preferences that were previously kept in check by the previously higher prices that signaled to me I have to consider the relatively greater number of things I have to sacrifice to get pens at the higher normal prices. In other words, the sale tipped my preferences in one direction instead of the other.
Now, why was the University Bookstore not concerned about tipping our preferences for textbooks? Imagine what would have happened if textbooks were also 25 percent cheaper on that day. I reasonably speculate the basement floor of the University Bookstore would resemble a department store on Black Friday. Why? Many students may already have in mind what courses they want to take the next semester. Thus, many students would go and buy the appropriate textbooks for the next semester last Monday. In the extreme case of students who had declared or were sure of their majors and had already drawn up long term plans of the courses they want to take could have bought textbooks for the rest of their academic careers at University of Wisconsin if they assumed they will live long enough and they will not encounter a better sale in the future.
The University Bookstore can expect that every time before a new semester begins the sales of textbooks will spike. Therefore, the demand for textbooks is reliable and predictable. Even without a sale, the textbooks will be sold eventually. This implies an external source independent of the University Bookstore that is influencing students’ preferences for textbooks.
As a consequence the University Bookstore does not have to depend on lowering prices to augment its sale of textbooks. Even if it does, it will only speed up the sale of textbooks without changing the quantity ultimately sold because students will not buy more textbooks just because they’re cheaper (unless some students plan to resell extra textbooks to people who missed the sale like outsiders or new students in the future). In fact, because the quantity of textbook sold will be the same with or without the price cuts, the University Bookstore would face lower revenues if it decides to lower prices.
Thus, because students’ demand for textbooks is assured, the University Bookstore has no incentive to include textbooks in the sale. Remember, I am talking about maintaining normal prices of textbooks, not raising them. Doing so beyond a certain extent would push some students to alternative sources of textbooks. Thus, it made economic sense for the University Bookstore to not put their books on sale, even if it costs students.
Heikal Badrulhisham ([email protected]) is a freshman.
