This recent article in the CS Monitor asks why HDMI cables are so expensive, and suggests that a $5 HDMI cable from Amazon is “not really” different from a $140 brand name one sold at Best Buy. A number of people have commented on the pricing of audiophile AV equipment such as receivers, DVD players, speakers and connecting cables. It seems that some customers are willing to pay huge price premiums in search for better sound, whereas others question whether there is any audibly discernible quality difference to justify the premiums.
While the price dispersion may seem high, it is not exclusive to the audiophile market. There are several studies, for example, Gerstner 1985, which find that the price-quality relationship is not as robust as often believed. For the price-quality relationship to arise, a sufficient number of consumers have to be informed about quality so that a firm cannot risk losing their patronage by charging a high price for a low quality product. There will always be other consumers who take price as a signal of quality, essentially trusting that “the market” has kept the firms’ urge to sell low quality products at high prices in check.
However, the point is sometimes made that unlike many other markets, with AV components (a) it is simple to electronically compare the fidelity of reproduction of a digital signal at the input and output ends of these devices, and (b) it is equally simple to do double-blind comparison of these devices. Thus the subjective or perceived element can be reduced. But, in fact, it’s not so common to see a review that actually does such comparisons. Reviews are based on a couple of listening experiences, might mention tangible things like the packaging, gold-plated contacts and weight - the DVD player has a “solid” feel to it. On the positive side, design and manufacturing quality like price can signal overall quality.
To return to the issues of why HDMI cables are sold at such price difference, possible explanations are: (a) There is no objective quality difference and manufacturers take advantage of the consumers’ belief in the price-quality relationship. (b) There is no objective quality difference but the music actually sounds better coming from a more expensive component (like a placebo effect). (c) Higher priced components have objectively better quality, as this article claims. (d) Each of the above explanations plays a contributing role.
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