What price makes a good a status good? Results from a mating game

Tobias Thomas

European Journal of Law and Economics, 2013, vol. 36, issue 1, 35-55

Abstract: This contribution provides a game theoretical derivation of market demand for status goods as a function of the level and distribution of income: if (1) the price is sufficiently low, everyone buys the good; if (2) the price is sufficiently high, only the rich buy the good (a status good in a narrow sense). If (3) the price is located in very high or in middle range, demand collapses. Thereby, we explain the critical price from which a status good acts as a distinctive signal. In addition, this approach shows the potential welfare-improving impact of conspicuous consumption. Copyright Springer Science+Business Media, LLC 2013

Keywords: Conspicuous consumption; Luxury tax; Mating model; Signaling game; Status good; C70; D11; D82 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://hdl.handle.net/10.1007/s10657-011-9273-4 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:ejlwec:v:36:y:2013:i:1:p:35-55

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10657

DOI: 10.1007/s10657-011-9273-4

Access Statistics for this article

European Journal of Law and Economics is currently edited by Jürgen Georg Backhaus, Giovanni B. Ramello and Alain Marciano

More articles in European Journal of Law and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().