Indie authors join Amazon in asking big publishers to lower prices: rational or not?

DBW's Jeremy Greenfield wonders why many self-published authors are supporting Amazon in its request that big publishers lower their prices. Self-published authors sell their books at low prices so they should be happy that Hachette, HarperCollins and so on keep prices high, right? Nobody has ever saw H&M, Zara, Forever 21 and other low-cost fashion retailers begging Ralph Lauren or Giorgio Armani to lower prices and steal their customers.

Greenfield quotes publishing expert Mike Shatzin:

One other aspect of this whole discussion which is mystifying (or revealing) is Amazon’s success getting indie authors to cheer them on as they pound the publishers to lower prices. (The new Amazon statement is made in a letter sent to KDP authors.) This is absolutely indisputably against the interests of the self-published authors themselves, who are much better off if the branded books have higher prices and leave the lower price tiers to them.

Greenfield also reports the opinion of (former self-published and now Amazon's author) Barry Eisler:

It’s certainly possible that high legacy prices create an opportunity for indie authors to sell their books for less. But there is another possibility — that more readers will spend more money on all books overall if more individual books cost less. 

To put it another way: if I had a choice between selling my books at $5.00 into a market where all other books were priced at $15.00, on the one hand, and selling my books at $5.00 into a market where all other books were priced at $5.00, on the other hand, I would prefer the second market because it would be so much bigger [...]. 

The point is, you can grow a market with low prices in such a way that individual sellers make more money in the bigger low-price market than they would have made undercutting prices in the smaller, high-priced market. When perceived value goes up, consumers spend more money. The market thereby grows, and individual sellers, even if the percentage of their slice of that market remains constant, make more money.

I am sure that Barry Eisler's novels are beautiful but I would not recommend a business strategy handbook written by him. His argument rests on:

• the strong assumption that the market demand for books is elastic (when you lower the price of books the number of books bought increases more than proportionally, so the total revenues grow); this is one of the claims made by Amazon in its appeal to authors, but it is not supported by independent research, as far as I know;
• the delusional idea that all individual sellers win when the pie of the market is larger; this is obviously not so; the share of pie for each seller will depend on the price of their products; price competition by big publishers would reduce the market share of indie authors, possibly more than compensating the increase in the size of the market.

So why do self-published authors want big publishers to lower prices? I list some possible answers:

1. they do not, except for some prominent or vociferous indie authors;
2. self-published authors are mad at the traditional publishers and they secretly want that Amazon kills them all;
3. they believe that a "thick market" for books will benefit authors; in a thick market there are many sellers and many buyers, which makes easier for each of them to find a good match; this is the reason why, for example, it is better to be a software programmer in San Francisco than in Kansas City; it is true to you face a lot of competition by thousands of other software programmers in San Francisco, but there are so many possible employers there that it is more probable (than it is in Kansas City) that you will find one that values exactly your specific competencies. This means that you will get paid for what you are really worth. 

Less technical version of the thick market effect: self-published authors did not find a good match among the traditional publishers, because there are only a few of them and they own the trade; lower prices could create a more democratic market environment, with more readers and in which publishers have less power and authors have more options, extracting more value from their talent.

The thick market effect is well documented for labor, housing, and other markets. I am note sure that it holds for the book market, but I suppose this was the general idea behind the (per se wrong) Eisler's argument.