[Racing0461]

Is it really a Veblen goods when the ROI on marketing/social status increases appropriately?

In the same way a company can pay for marketing, buying a rolex/lambo is like exchanging fiscal currency for social currency.

We don't call buying 100k in adsense a veblen good but buying a 100k watch is?

[throwup238]

A Veblen good means the demand increases when the price increases. ROI doesn't factor in.

Nobody would buy 100k of adsense ads if they didn't return more than 100k in revenue. With a Veblen good, the price tag is the point.

[rubyfan]

Haha, I’m pretty sure a lot of people buy 100K of adsense ads that doesn’t return 100K in revenue.

[throwup238]

Good point, though most of them probably don't do it for very long unless they're money laundering (I would argue the big companies like Coca Cola spending on brand maintenance get a good ROI). The list of people who buy Veblen goods who can't ever return a profit is too long to exhaustively list: almost all jewelry, luxury watches, art, and luxury cars for example. It's only dumb luck that a few Rolexes have resale value; they're probably one scandal away from destroying all that value.

[etrautmann]

It’s strange to know some people think that way, but I’ve never experienced a community where someone would get more respect for having a Rolex. It’s such a bizarre idea - who cares

[shiroiuma]

Like many things, it totally depends on your social circle. Obviously, you're not in the social circles that value Rolexes, just like people in those circles probably don't know anyone who cares about D&D, and think it's a bizarre idea that anyone would want to spend their time that way.

[etrautmann]

Right - I guess it just feels strange that in zero of my circles, which include the startup, VC, and parts of the finance world, does anyone I've spoken with outwardly care about these things. Perhaps I'm oblivious, or willfully naive, but the idea of purchased bling signaling status strikes me as inherently antiquated. You can't buy cool, etc.

[gosub100]

I'm going to offer a guess: say you're a wealthy person (whatever that word means to you) and you want a social filter to keep you from interacting with people who have less wealth. One way to do that is to buy luxury goods and only entertain conversations, dates, etc with people who do. most people would say that's inherently shallow, but say you were super rich, think of how hard it would be to find people to go on trips or activities with. How many times are you going to be met with "oh I can't afford it/can't get the time off work/etc" ? even being polite, that causes friction between friendships. The watch alone isn't going to do it, but taken with the bigger picture, it's at least a hint that you are of some minimum economic status and I imagine some people find that useful.

[shiroiuma]

Interesting; I'd expect you to meet more of those people in those circles actually. Perhaps it's generational?

[nprateem]

Incredibly shallow people

[ssivark]

Fascinating analogy. While it might not apply to adsense, I think adverts in high-profile slots like the Super Bowl might well have signaling facets much like Veblen goods (for companies).