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Pricing policy

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Pricing isn’t only a finance function: it’s a strategic weapon.

You can manipulate demand through price elasticity:

  • Lower prices to expand usage (sometimes radically so), especially where Jevons paradox applies (e.g. cheaper compute leads to more compute consumption).
  • Raising prices in constrained supply markets can extract maximum value.

Fragmentation plays (deliberately splitting a market into niches or offering modular pricing) can also allow you to dominate subsegments or commoditise parts of the value chain others depend on. Knowing when to be expensive and when to be cheap is a competitive art.

  • Fragmentation (Competitor): Pricing strategies can deliberately splinter markets.
  • Creating constraints (Deaccelerators): Pricing manipulation can create pseudo-scarcity or capacity limits.
  • Exploiting existing constraints (Deaccelerators): Price elasticity plays better when others are supply-bound.
  • Sweat & Dump (Dealing with toxicity): Low pricing can make assets look more viable before dumping.
  • Exploiting buyer/supplier power (Market): Pricing is often the instrument used to exercise that power.