Advanced Search
MyIDEAS: Login

Mating a la Spence: Deriving the Market Demand Function for Status Goods


Author Info

  • Thomas, Tobias

    (Helmut Schmidt University, Hamburg)

Registered author(s):


    Conspicuous consumption of luxuries plays a central role in the work of Thorstein B. Veblen. More recently, interpersonal effects have emerged as an important factor in consumption theory. However, the inadequate modelling of individuals' interaction often leads to questionable results with regard to the market demand function for status goods. Following Spence, who recommended the application of his Job Market Signaling to conspicuous consumption, in Mating a la Spence potential partners are faced with asymmetric information: Individuals know their own proper- ties, but are incompletely informed about potential partners. However, individuals have the possibility to signal their properties by demonstrative consumption. Mating a la Spence provides a game theoretical derivation of the market demand function for status goods with respect to level and distribution of income in the considered economy: If (1) the price is low, everyone buys the good; if (2) the price is high, only the rich buy the good (a status good in a narrow sense). If (3) the price is located in a very high as well as in a middle range, demand drops. In addition this approach allows conclusions about the potential welfare improving impact of conspicuous consumption.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL:
    File Function: Full text
    Download Restriction: no

    Bibliographic Info

    Paper provided by Helmut Schmidt University, Hamburg in its series Working Paper with number 63/2007.

    as in new window
    Length: 28 pages
    Date of creation: Sep 2007
    Date of revision:
    Handle: RePEc:ris:vhsuwp:2007_063

    Contact details of provider:
    Postal: Holstenhofweg 85, D-22043 Hamburg
    Phone: +49 (0)40 6541 2590
    Fax: +49 (0)40 6541 2780
    Web page:
    More information through EDIRC

    Related research



    No references listed on IDEAS
    You can help add them by filling out this form.



    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


    Access and download statistics


    When requesting a correction, please mention this item's handle: RePEc:ris:vhsuwp:2007_063. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Max Steinhardt).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.