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Without reliable (and valid) data about service and quality, it is impossible for consumers to make intelligent purchasing decisions based upon those criteria. Without differentiation in the market along those criteria, there is no decision to make.

We cannot really know how many customers might make such decisions because such information is not readily available. Even when the information CAN be found, there is a cost to finding it (i.e., in time and inconvenience, usually). As best I can tell, there differences in quality across airlines is very low, and they actively try to hide information about prices.

Might app users be more willing to pay for apps if they REALLY knew the $1 or $2 was better than the free version?

It appears to me that this behavior is a rational response to a lack of reliable information. IAP purchases come after the customer has tried out enough of the app to have an informed view of its quality.




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