why is the 993 worth so much more than a 996?
06-19-2007, 09:13 AM
#181
Anybody who thinks that supply and demand detemine market pricing must have studied economics at the high school level, sometime prior to 1980. Sometime when you're bored, look up 'behavioral economics'. Here's the answer to the original poster's question, as best I can cobble it together:
993s cost more because Porsche doesn't make air cooled cars anymore. That simple fact, irrespective of the value of the technology and irrespective of supply, is enough to bubble pricing. For many, that attribute has sentimental value, too. It's emotionally charged, and this, too, increases the value people choose to perceive (a concept called 'framing'). Porsche owners are culty and think and behave as a pack about certain car related things. This will cause perceived values to rise specifically within this group (while the general population doesn't give a hoot and wouldn't pay that kind of money for an old car on a bet). And, by this same token, those among them who have 993s will respond to all this in many cases by not selling or trading in their cars. That creates not only the fact of scarcity, but psychologically increases desire among those within the group who don't have one by promoting this scarcity.
It has nothing to do with the quality of the car, objectively or subjectively, nor with supply and demand. It has to do with something you can't get anymore which tends to drive markets into a frenzy. At least temporarily. But it's a bubble, because the only group for whom the value of the car is high is the hard core Porscheophile, and they are almost as limited in number as the cars themselves. 993 owners will hang on to their cars for awhile, then a bunch will want to cash out and sell their cars. Meanwhile, as that happens, the hysteria over the loss of the air cooled car will die down, people will move on to something else, and the market for the 993 will normalize in size. When these events collide, prices will drop and fall into the historical pattern for 'important' Porsche models... a bit of a premium, but not a fortune... and there they will stay until enough of them have rotted away that someone says, 'OMG the 993s are disappearing!' and the cycle will start over in miniature with fewer cars, but even fewer people who give a damn enough to pay for them.
The 12 pages of debate about this only proves it's emotional valuation. You have a bunch of old school Porsche lovers trying to defend a status quo, versus a bunch of insecure newcomers trying to square their purchase decision with what they fear, and the seemingly prima facie evidence of market values fueling the debate. Vintage behavioral economics. They gave someone a Nobel for it in '02.
Now you know.
993s cost more because Porsche doesn't make air cooled cars anymore. That simple fact, irrespective of the value of the technology and irrespective of supply, is enough to bubble pricing. For many, that attribute has sentimental value, too. It's emotionally charged, and this, too, increases the value people choose to perceive (a concept called 'framing'). Porsche owners are culty and think and behave as a pack about certain car related things. This will cause perceived values to rise specifically within this group (while the general population doesn't give a hoot and wouldn't pay that kind of money for an old car on a bet). And, by this same token, those among them who have 993s will respond to all this in many cases by not selling or trading in their cars. That creates not only the fact of scarcity, but psychologically increases desire among those within the group who don't have one by promoting this scarcity.
It has nothing to do with the quality of the car, objectively or subjectively, nor with supply and demand. It has to do with something you can't get anymore which tends to drive markets into a frenzy. At least temporarily. But it's a bubble, because the only group for whom the value of the car is high is the hard core Porscheophile, and they are almost as limited in number as the cars themselves. 993 owners will hang on to their cars for awhile, then a bunch will want to cash out and sell their cars. Meanwhile, as that happens, the hysteria over the loss of the air cooled car will die down, people will move on to something else, and the market for the 993 will normalize in size. When these events collide, prices will drop and fall into the historical pattern for 'important' Porsche models... a bit of a premium, but not a fortune... and there they will stay until enough of them have rotted away that someone says, 'OMG the 993s are disappearing!' and the cycle will start over in miniature with fewer cars, but even fewer people who give a damn enough to pay for them.
The 12 pages of debate about this only proves it's emotional valuation. You have a bunch of old school Porsche lovers trying to defend a status quo, versus a bunch of insecure newcomers trying to square their purchase decision with what they fear, and the seemingly prima facie evidence of market values fueling the debate. Vintage behavioral economics. They gave someone a Nobel for it in '02.
Now you know.
06-19-2007, 09:21 AM
#182
Originally Posted by BruceP
Anybody who thinks that supply and demand detemine market pricing must have studied economics at the high school level, sometime prior to 1980. Sometime when you're bored, look up 'behavioral economics'. Here's the answer to the original poster's question, as best I can cobble it together:
993s cost more because Porsche doesn't make air cooled cars anymore. That simple fact, irrespective of the value of the technology and irrespective of supply, is enough to bubble pricing. For many, that attribute has sentimental value, too. It's emotionally charged, and this, too, increases the value people choose to perceive (a concept called 'framing'). Porsche owners are culty and think and behave as a pack about certain car related things. This will cause perceived values to rise specifically within this group (while the general population doesn't give a hoot and wouldn't pay that kind of money for an old car on a bet). And, by this same token, those among them who have 993s will respond to all this in many cases by not selling or trading in their cars. That creates not only the fact of scarcity, but psychologically increases desire among those within the group who don't have one by promoting this scarcity.
It has nothing to do with the quality of the car, objectively or subjectively, nor with supply and demand. It has to do with something you can't get anymore which tends to drive markets into a frenzy. At least temporarily. But it's a bubble, because the only group for whom the value of the car is high is the hard core Porscheophile, and they are almost as limited in number as the cars themselves. 993 owners will hang on to their cars for awhile, then a bunch will want to cash out and sell their cars. Meanwhile, as that happens, the hysteria over the loss of the air cooled car will die down, people will move on to something else, and the market for the 993 will normalize in size. When these events collide, prices will drop and fall into the historical pattern for 'important' Porsche models... a bit of a premium, but not a fortune... and there they will stay until enough of them have rotted away that someone says, 'OMG the 993s are disappearing!' and the cycle will start over in miniature with fewer cars, but even fewer people who give a damn enough to pay for them.
The 12 pages of debate about this only proves it's emotional valuation. You have a bunch of old school Porsche lovers trying to defend a status quo, versus a bunch of insecure newcomers trying to square their purchase decision with what they fear, and the seemingly prima facie evidence of market values fueling the debate. Vintage behavioral economics. They gave someone a Nobel for it in '02.
Now you know.
993s cost more because Porsche doesn't make air cooled cars anymore. That simple fact, irrespective of the value of the technology and irrespective of supply, is enough to bubble pricing. For many, that attribute has sentimental value, too. It's emotionally charged, and this, too, increases the value people choose to perceive (a concept called 'framing'). Porsche owners are culty and think and behave as a pack about certain car related things. This will cause perceived values to rise specifically within this group (while the general population doesn't give a hoot and wouldn't pay that kind of money for an old car on a bet). And, by this same token, those among them who have 993s will respond to all this in many cases by not selling or trading in their cars. That creates not only the fact of scarcity, but psychologically increases desire among those within the group who don't have one by promoting this scarcity.
It has nothing to do with the quality of the car, objectively or subjectively, nor with supply and demand. It has to do with something you can't get anymore which tends to drive markets into a frenzy. At least temporarily. But it's a bubble, because the only group for whom the value of the car is high is the hard core Porscheophile, and they are almost as limited in number as the cars themselves. 993 owners will hang on to their cars for awhile, then a bunch will want to cash out and sell their cars. Meanwhile, as that happens, the hysteria over the loss of the air cooled car will die down, people will move on to something else, and the market for the 993 will normalize in size. When these events collide, prices will drop and fall into the historical pattern for 'important' Porsche models... a bit of a premium, but not a fortune... and there they will stay until enough of them have rotted away that someone says, 'OMG the 993s are disappearing!' and the cycle will start over in miniature with fewer cars, but even fewer people who give a damn enough to pay for them.
The 12 pages of debate about this only proves it's emotional valuation. You have a bunch of old school Porsche lovers trying to defend a status quo, versus a bunch of insecure newcomers trying to square their purchase decision with what they fear, and the seemingly prima facie evidence of market values fueling the debate. Vintage behavioral economics. They gave someone a Nobel for it in '02.
Now you know.
Behavioral economics most definitely affects value, but so does supply, and saying that supply and demand is irrelevant is not really accurate. If you want something and you cannot find very many examples of the car, you will be forced to pay more because sellers will not have to cut their price in order to find a willing buyer. Silver 996s are everywhere. No matter how badly the group of buyers want them, the price will be constrained due to the size of the inventory of the used market . . . the sellers will reduce the price to ensure that "their" particular silver 996 is purchased over every other sample.
06-19-2007, 09:29 AM
#183
Race Car
Originally Posted by BruceP
Anybody who thinks that supply and demand detemine market pricing must have studied economics at the high school level, sometime prior to 1980. Sometime when you're bored, look up 'behavioral economics'. Here's the answer to the original poster's question, as best I can cobble it together:
993s cost more because Porsche doesn't make air cooled cars anymore. That simple fact, irrespective of the value of the technology and irrespective of supply, is enough to bubble pricing. For many, that attribute has sentimental value, too. It's emotionally charged, and this, too, increases the value people choose to perceive (a concept called 'framing'). Porsche owners are culty and think and behave as a pack about certain car related things. This will cause perceived values to rise specifically within this group (while the general population doesn't give a hoot and wouldn't pay that kind of money for an old car on a bet). And, by this same token, those among them who have 993s will respond to all this in many cases by not selling or trading in their cars. That creates not only the fact of scarcity, but psychologically increases desire among those within the group who don't have one by promoting this scarcity.
It has nothing to do with the quality of the car, objectively or subjectively, nor with supply and demand. It has to do with something you can't get anymore which tends to drive markets into a frenzy. At least temporarily. But it's a bubble, because the only group for whom the value of the car is high is the hard core Porscheophile, and they are almost as limited in number as the cars themselves. 993 owners will hang on to their cars for awhile, then a bunch will want to cash out and sell their cars. Meanwhile, as that happens, the hysteria over the loss of the air cooled car will die down, people will move on to something else, and the market for the 993 will normalize in size. When these events collide, prices will drop and fall into the historical pattern for 'important' Porsche models... a bit of a premium, but not a fortune... and there they will stay until enough of them have rotted away that someone says, 'OMG the 993s are disappearing!' and the cycle will start over in miniature with fewer cars, but even fewer people who give a damn enough to pay for them.
The 12 pages of debate about this only proves it's emotional valuation. You have a bunch of old school Porsche lovers trying to defend a status quo, versus a bunch of insecure newcomers trying to square their purchase decision with what they fear, and the seemingly prima facie evidence of market values fueling the debate. Vintage behavioral economics. They gave someone a Nobel for it in '02.
Now you know.
993s cost more because Porsche doesn't make air cooled cars anymore. That simple fact, irrespective of the value of the technology and irrespective of supply, is enough to bubble pricing. For many, that attribute has sentimental value, too. It's emotionally charged, and this, too, increases the value people choose to perceive (a concept called 'framing'). Porsche owners are culty and think and behave as a pack about certain car related things. This will cause perceived values to rise specifically within this group (while the general population doesn't give a hoot and wouldn't pay that kind of money for an old car on a bet). And, by this same token, those among them who have 993s will respond to all this in many cases by not selling or trading in their cars. That creates not only the fact of scarcity, but psychologically increases desire among those within the group who don't have one by promoting this scarcity.
It has nothing to do with the quality of the car, objectively or subjectively, nor with supply and demand. It has to do with something you can't get anymore which tends to drive markets into a frenzy. At least temporarily. But it's a bubble, because the only group for whom the value of the car is high is the hard core Porscheophile, and they are almost as limited in number as the cars themselves. 993 owners will hang on to their cars for awhile, then a bunch will want to cash out and sell their cars. Meanwhile, as that happens, the hysteria over the loss of the air cooled car will die down, people will move on to something else, and the market for the 993 will normalize in size. When these events collide, prices will drop and fall into the historical pattern for 'important' Porsche models... a bit of a premium, but not a fortune... and there they will stay until enough of them have rotted away that someone says, 'OMG the 993s are disappearing!' and the cycle will start over in miniature with fewer cars, but even fewer people who give a damn enough to pay for them.
The 12 pages of debate about this only proves it's emotional valuation. You have a bunch of old school Porsche lovers trying to defend a status quo, versus a bunch of insecure newcomers trying to square their purchase decision with what they fear, and the seemingly prima facie evidence of market values fueling the debate. Vintage behavioral economics. They gave someone a Nobel for it in '02.
Now you know.
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+1 WHAT HE SAID.
06-19-2007, 09:30 AM
#184
Originally Posted by TD in DC
Behavioral economics most definitely affects value, but so does supply, and saying that supply and demand is irrelevant is not really accurate. If you want something and you cannot find very many examples of the car, you will be forced to pay more because sellers will not have to cut their price in order to find a willing buyer. Silver 996s are everywhere. No matter how badly the group of buyers want them, the price will be constrained due to the size of the inventory of the used market . . . the sellers will reduce the price to ensure that "their" particular silver 996 is purchased over every other sample.
06-19-2007, 09:44 AM
#185
Rennlist Member
Originally Posted by BruceP
Anybody who thinks that supply and demand detemine market pricing must have studied economics at the high school level, sometime prior to 1980. Sometime when you're bored, look up 'behavioral economics'. Here's the answer to the original poster's question, as best I can cobble it together:
993s cost more because Porsche doesn't make air cooled cars anymore. That simple fact, irrespective of the value of the technology and irrespective of supply, is enough to bubble pricing. For many, that attribute has sentimental value, too. It's emotionally charged, and this, too, increases the value people choose to perceive (a concept called 'framing'). Porsche owners are culty and think and behave as a pack about certain car related things. This will cause perceived values to rise specifically within this group (while the general population doesn't give a hoot and wouldn't pay that kind of money for an old car on a bet). And, by this same token, those among them who have 993s will respond to all this in many cases by not selling or trading in their cars. That creates not only the fact of scarcity, but psychologically increases desire among those within the group who don't have one by promoting this scarcity.
It has nothing to do with the quality of the car, objectively or subjectively, nor with supply and demand. It has to do with something you can't get anymore which tends to drive markets into a frenzy. At least temporarily. But it's a bubble, because the only group for whom the value of the car is high is the hard core Porscheophile, and they are almost as limited in number as the cars themselves. 993 owners will hang on to their cars for awhile, then a bunch will want to cash out and sell their cars. Meanwhile, as that happens, the hysteria over the loss of the air cooled car will die down, people will move on to something else, and the market for the 993 will normalize in size. When these events collide, prices will drop and fall into the historical pattern for 'important' Porsche models... a bit of a premium, but not a fortune... and there they will stay until enough of them have rotted away that someone says, 'OMG the 993s are disappearing!' and the cycle will start over in miniature with fewer cars, but even fewer people who give a damn enough to pay for them.
The 12 pages of debate about this only proves it's emotional valuation. You have a bunch of old school Porsche lovers trying to defend a status quo, versus a bunch of insecure newcomers trying to square their purchase decision with what they fear, and the seemingly prima facie evidence of market values fueling the debate. Vintage behavioral economics. They gave someone a Nobel for it in '02.
Now you know.
993s cost more because Porsche doesn't make air cooled cars anymore. That simple fact, irrespective of the value of the technology and irrespective of supply, is enough to bubble pricing. For many, that attribute has sentimental value, too. It's emotionally charged, and this, too, increases the value people choose to perceive (a concept called 'framing'). Porsche owners are culty and think and behave as a pack about certain car related things. This will cause perceived values to rise specifically within this group (while the general population doesn't give a hoot and wouldn't pay that kind of money for an old car on a bet). And, by this same token, those among them who have 993s will respond to all this in many cases by not selling or trading in their cars. That creates not only the fact of scarcity, but psychologically increases desire among those within the group who don't have one by promoting this scarcity.
It has nothing to do with the quality of the car, objectively or subjectively, nor with supply and demand. It has to do with something you can't get anymore which tends to drive markets into a frenzy. At least temporarily. But it's a bubble, because the only group for whom the value of the car is high is the hard core Porscheophile, and they are almost as limited in number as the cars themselves. 993 owners will hang on to their cars for awhile, then a bunch will want to cash out and sell their cars. Meanwhile, as that happens, the hysteria over the loss of the air cooled car will die down, people will move on to something else, and the market for the 993 will normalize in size. When these events collide, prices will drop and fall into the historical pattern for 'important' Porsche models... a bit of a premium, but not a fortune... and there they will stay until enough of them have rotted away that someone says, 'OMG the 993s are disappearing!' and the cycle will start over in miniature with fewer cars, but even fewer people who give a damn enough to pay for them.
The 12 pages of debate about this only proves it's emotional valuation. You have a bunch of old school Porsche lovers trying to defend a status quo, versus a bunch of insecure newcomers trying to square their purchase decision with what they fear, and the seemingly prima facie evidence of market values fueling the debate. Vintage behavioral economics. They gave someone a Nobel for it in '02.
Now you know.
06-19-2007, 09:47 AM
#186
Originally Posted by Steven C.
Thanks Bruce for stretching what I have been saying to 4 paragraphs
06-19-2007, 09:53 AM
#187
Rennlist Member
Originally Posted by BruceP
A perfect example of how inadequate 'supply and demand' is as an explanation for market pricing. As a consultant, I couldn't make a living if I said this kind of stuff in seven words. But 50 pages, and I'm off to the Porsche dealer!
06-19-2007, 10:06 AM
#188
Originally Posted by BruceP
Anybody who thinks that supply and demand detemine market pricing must have studied economics at the high school level, sometime prior to 1980.............................................
Porsche doesn't make air cooled cars anymore. That creates not only the fact of scarcity, but psychologically increases desire among those within the group who don't have one by promoting this scarcity.
Porsche doesn't make air cooled cars anymore. That creates not only the fact of scarcity, but psychologically increases desire among those within the group who don't have one by promoting this scarcity.
Yeh, I know....... context, man, context.
06-19-2007, 11:20 AM
#189
Originally Posted by BruceP
It's not that 'supply and demand' is inaccurate. It's that it's a vague and grossly oversimplified explanation of how markets work, especially little tiny ones like this. Hell, even oil and gold aren't that simple.
The truth is that Porsche buyers are not a single homogenous group. I would dare to say (with no research to back it up) that there are more discrete sub-markets to the Porsche buyers pool (including just the pool for 911s) than there are for most types of cars. Among others, you have the: (1) guys who use the car solely for racing and/or track events; (2) guys who use the car for track events and driving on the streets; (3) daily drivers; (4) weekend joyriders; (5) poseurs and others who buy the car solely for status; (6) those who think its unique form is beautiful; (7) street racer types (they are out there); (8) engineering types who like the uniqueness of the design; and (9) nostalgic types who like the marque for sentimental reasons. Each of these submarkets would react differently to each mark, including the question of "which is more desireable, the 993 or the 996." There is no single right or wrong answer. So, the "illogical" desire for one model over another, which is completely valid phenomena, influences the decisions of some groups, but not others, but one of the main issues remains how easy it is for each subgroup to find the type of 911 they seek.
06-19-2007, 11:27 AM
#190
Originally Posted by TD in DC
The truth is that Porsche buyers are not a single homogenous group. I would dare to say (with no research to back it up) that there are more discrete sub-markets to the Porsche buyers pool (including just the pool for 911s) than there are for most types of cars.
06-19-2007, 11:34 AM
#191
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Originally Posted by Ray S
An interesting analogy but flawed IMHO. There are many reasons air-cooling makes good sense in light aircraft and just as many reasons that make air-cooling problematic in cars.
But as long as we are making up silly analogies keep enjoying your "P51" 993 and I'll keep enjoying my "F16" 996.
But as long as we are making up silly analogies keep enjoying your "P51" 993 and I'll keep enjoying my "F16" 996.
PS. A P51 is water cooled ! I'm thinking more like a P47!
06-19-2007, 11:53 AM
#195
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Originally Posted by Benjamin Choi
they are so big now compared to the 993 at least from a visual standpoint (not sure how the measurements come out).
