Prices in Nascent Markets

On another day, c'mon, c'mon
With these ropes tied tight we can do no wrong
Now we grieve 'cause now it's gone
Things were good when we were young
--Von Bondies

Saw an insightful comment the other day. Prices are set by supply and demand in mature markets. In nascent markets, supply and demand has yet to be established. Instead, entrepreneurs post initial prices based on where they think buyers will perceive value.

Apple might price a new iPhone model at $1000 but customers may not show up to buy them. Or customers might show up in such quantities that prices go up with demand.

When markets are young, prices can be volatile.