 Less is more: A theory of minimalist luxuryZ. Jessie Liu, Pinar Yildirim and Z. John Zhang Journal of Economics & Management Strategy, 2024, vol. 33, issue 1, 78-110 Abstract: We show theoretically that when high‐quality, low‐price counterfeits exist and are visibly indistinguishable from authentic products, the status‐seeking wealthy may embrace a “less is more” purchasing strategy or what we refer to as the minimalist luxury strategy, to signal their status. These are the wealthy who have a high disutility of shopping for counterfeits. Specifically, in our model, only buyers know the authenticity of their own purchases. Because of this information asymmetry, these wealthy buyers may purposefully restrain from consuming luxury goods as a sacrifice of functional utility to stand out, a signaling strategy that the rest are not willing to mimic. Thus, “less” functional utility allows those status‐seeking wealthy to enjoy “more” symbolic utility that the society bestows on their perceived status. This minimalist luxury strategy is in sharp contrast to Veblen's conspicuous consumption strategy, as well as to the maximalist luxury strategy proposed by Liu et al. We derive this minimalist luxury equilibrium, discuss how signaling in our context can differ from that of Veblen and Liu et al., and explore its managerial implications for the luxury goods industry. Date: 2024 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:jemstr:v:33:y:2024:i:1:p:78-110 Ordering information: This journal article can be ordered from Access Statistics for this article More articles in Journal of Economics & Management Strategy from Wiley Blackwell |
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