Nothing exposes human folly quite like our willingness to pay more for something simply because it costs more.
These "Veblen goods," named after economist Thorstein Veblen who first mapped this peculiar behavior, reveal how deeply status-seeking is wired into our psyche. People aren't just willing to pay premium prices for luxury cars and designer handbags— they actively desire these items more when prices surge. As noted in Wikipedia, wine drinkers even convinced themselves identical wines tasted better when told they carried a higher price tag.
This mass delusion comes at a steep societal cost. Researcher B. Curtis Eaton describes Veblen goods as "deadweight loss"— burning money on the altar of status competition.
The science behind this self-deception is almost comical. A 2007 study published in Science found that when people compare their rewards to others, it directly affects activity in the brain's reward centers. The researchers conducted fMRI scans of pairs of subjects performing tasks for monetary rewards, and found that the ventral striatum – a key reward processing region – responded to relative payment differences, not just absolute rewards.
"The higher prices of Veblen goods may make them desirable as a status symbol," notes Wikipedia. Take the Rolex Daytona watch, which routinely sells above its already stratospheric list price. Buyers aren't purchasing a timepiece — they're buying membership in an imaginary club of supposed superiority. As Veblen wrote: "Conspicuous consumption of valuable goods is a means of reputability to the gentleman of leisure."
Previously:
• Thorstein Veblen, Prescient on Today's Media
• Study: people who buy counterfeit bags likely to buy real ones later
• After seven years, the original $17,000 gold Apple Watch is officially obsolete
• Save yourself $925 by not buying Balenciaga's 'towel skirt'
