We examine a model of conspicuous consumption and explore the nature of competition in markets for conspicuous goods. We assume that, in addition to intrinsic utility, individuals seek status, and that perceptions of wealth affect status. Under identifiable conditions, the model generates Veblen...

We investigate consumer choice where individuals care not only about the absolute values of consumption, but also about their status. This is defined as their ordinal rank in the distribution of consumption of one "positional" good. In such a situation, the consumer's problem becomes strategic...

Consumers often use luxury products to signal their aspirational selves. In social media, consumers can publicly affiliate with such products and brands virtually without having to physically own them. This research demonstrates how social media can enable consumers to engage with aspirational...

This paper examines firms' product policies when they sell an add-on (e.g., Internet service) in addition to a base product (e.g., hotel rooms) under vertical differentiation (e.g., four- vs. three-star hotels). I show that the role of an add-on differs; higher-quality firms prefer to sell it as...

Current theorizing suggests that the valence of an affective state alone cannot explain indulgent consumption but that this is contingent on whether indulging can improve a negative state or will not hurt a positive state. This research shows that when an emotion is associated with the appraisal...

In this paper we model the development of consumption when there are interactions between consumers. The consumer recognizes three reference groups: peer, distinction, and aspiration. The interplay of aspiration and distinction can lead to 'waves' in consumption; for example, the avant-garde...