A note from Daniel

being expensive makes Velben goods a meaningful signal of wealth, because only a person with income to spare can access them. Because being wealthy is often considered something worth signaling, Veblen goods don't follow the usual model of supply and demand. Higher prices don't temper demand but instead drive it higher because people are paying for the signal more than the product.

Daniel The Great Mental Models, Volume 4, page 113 · December 21, 2024 Save to shelf
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