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Harvey Leibenstein: 2 ideas worth knowing

2 ideas from Harvey Leibenstein, each explained in a minute and credited to the original work. Free on Savvy.

• Some goods sell better the more expensive they get

  Normal demand curves fall as price rises, but for certain luxury goods — designer handbags, rare watches — a higher price can make them more desirable, because the price itself sig…

  — Harvey Leibenstein, building on Thorstein Veblen's The Theory of the Leisure Class (1899), Bandwagon, Snob, and Veblen Effects in the Theory of Consumers' Demand

• Wanting something more, purely because other people already want it

  Demand for a product, a candidate or a trend can rise simply because it's visibly popular, independent of any change in price or quality. Pollsters have documented voters shifting …

  — Harvey Leibenstein, Bandwagon, Snob, and Veblen Effects in the Theory of Consumers' Demand

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