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Veblen Effects in a Theory of Conspicuous Consumption
TLDR
This paper examined conditions under which "Veblen effects" arise from the desire to achieve social status by signaling wealth through conspicuous consumption, and explored factors that induce Veblen effect and investigated policy implications.Abstract:
The authors examine conditions under which 'Veblen effects' arise from the desire to achieve social status by signaling wealth through conspicuous consumption. While Veblen effects cannot ordinarily arise when preferences satisfy a 'single-crossing property,' they may emerge when this property fails. In that case, 'budget' brands are priced at marginal cost, while 'luxury' brands, though not intrinsically superior, are sold at higher prices to consumers seeking to advertise wealth. Luxury brands earn strictly positive profits under conditions that would, with standard formulations of preferences, yield marginal-cost pricing. The authors explore factors that induce Veblen effects and they investigate policy implications. Copyright 1996 by American Economic Association.read more
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Incentives and Prosocial Behavior
TL;DR: This paper developed a theory of prosocial behavior that combines heterogeneity in individual altruism and greed with concerns for social reputation or self-respect, and analyzed the socially optimal level of incentives and how monopolistic or competitive sponsors depart from it.
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Incentives and Prosocial Behavior
TL;DR: In this paper, the authors build a theory of prosocial behavior that combines heterogeneity in individual altruism and greed with concerns for social reputation or self-respect, and analyze the equilibrium contracts offered by sponsors, including the level and confidentiality of incentives.
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A Theory of Conformity
TL;DR: In this paper, a model of social interaction in which individuals care about status as well as "intrinsic" utility (which refers to utility derived directly from consumption) is presented.
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Signaling Status with Luxury Goods: The Role of Brand Prominence
TL;DR: Brand prominence as mentioned in this paper is a taxonomy that assigns consumers to one of four groups according to their wealth and need for status, and demonstrate how each group's preference for conspicuously or inconspicuously branded luxury goods corresponds predictably with their desire to associate or dissociate with members of their own and other groups.
A Review and a Conceptual Framework of Prestige-Seeking Consumer Behavior
TL;DR: In this paper, the authors discuss the existing consumer knowledge dealing with aspects of prestige, and based on this literature, develop a conceptual framework useful for the analysis of prestige-seeking consumer behavior.
References
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Signaling Games and Stable Equilibria
In-Koo Cho,David M. Kreps +1 more
TL;DR: In this paper, the authors present a number of formal restrictions of this sort, investigate their behavior in specific examples, and relate these restrictions to Kohlberg and Mertens' notion of stability.
Book
A Course in Microeconomic Theory
TL;DR: This article developed a text in microeconomics that succeeds in being bothchallenging and user-friendly, designed for final-year undergraduate and graduate students of microeconomic theory, with numerous problem sets and exercises.
Book ChapterDOI
Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes
TL;DR: In this article, the authors consider a two-stage oligopoly game where, first, there is simultaneous production, and second, after production levels are made public, there was price competition.
Journal ArticleDOI
A Theory of Social Custom, of which Unemployment may be One Consequence
TL;DR: The authors examined adherence to social customs and found that social customs which are disadvantageous to the individual may still persist without erosion, if individuals are sanctioned by loss of reputation for disobedience of the custom.