...Veblen good A commodity is a Veblen good if people's preference for buying it increases as a direct function of its price. The definition does not require that any Veblen goods actually exist. However, it is claimed that some types of high-status goods, such as expensive wines or perfumes are Veblen goods, in that decreasing their prices decreases people's preference for buying them because they are no longer perceived as exclusive or high status products. The Veblen effect is named after the economist Thorstein Veblen, who invented the concepts of conspicuous consumption and status-seeking. The Veblen effect is one of a family of theoretically possible anomalies in the general theory of demand in microeconomics. Other related effects are: the snob effect: preference for a good decreases as the number of people buying it increases, and the bandwagon effect: preference for a good increases as the number of people buying it increases; Note that none of these effects in itself predicts what will happen to actual quantity demanded for the good (the number of units purchased) as price changes - they refer only to preferences or propensities to purchase. The actual effect on demand will depend on the range of other goods available, their prices, and their substitutabilities for the goods concerned. The effects are anomalies within demand theory because the theory normally assumes that preferences are independent of price or the number of units being sold. They...
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...Description When people see some new idea or product and wonder if they should adopt it, evidence of others enjoying and having fun is highly influential. Numbers are important for the bandwagon effect to take hold. If we see three people on the bandwagon and know that hundreds have not joined, then the reverse effect will take place and we will be loathe to join. If, on the other hand, we see the wagon nearly full with lots of people we know or admire, then we will desperately try to grab the 'final' places. Once bandwagons have enough participants they are often self-sustaining and people get on board for social rather than ideological reasons. Bandwagons often have limited lifetimes and eventually run out of steam. People will quickly abandon the 'sinking ship' if they see others leaving. Example A company releases a new product and shows adverts with a big group of people having a good time using the product. A political party holds a rousing rally, with music, speeches and much cheering. Those who go are encouraged to 'keep the faith' and 'bring others on board' and otherwise keep the bandwagon going. Discussion Building the early bandwagon may require ideological appeals, but then when we see desirable others in a group we feel the pull of social proof and seek to join in. A deeper need that drives the bandwagon effect is the need to belong. When we see a desirable group, we want to join in. Expectations and promise are important in the assumption of being a 'winner'...
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...Two Cheers for Consumerism In the article called 2 cheers for consumerism, the writer Twitchell explains how people, the consumers, are consuming more and more items everyday. According to the author of the article “The really interesting question may be not why we are so materialistic, but why we are unwilling to acknowledge and explore what seems the central characteristics of life.”. Many people spend most of their time and energy consuming or producing items all the time and most of that happened in the 20th century, like for example in the 1960’s. Some people consider this as Commercialism, and others as consumerism, but either way, commercialism or consumerism will stay up high for many people that like to buy stuff. The U.S. is a nation of consumers. Consumerism affects people in many ways, like for example age and many other things. The main idea for consumerism is that many people can’t resist having a specific item, most of those items are objects that they don’t really need. According to the author “ it is simply impossible to consume objects without consuming meaning.”. This means that consumerism is all around us, currents of desire are flowing around us all the time, like if it were white smoke. Some people say that consumerism It’s pretty much a waste because it’s now a big concern. America is considered a nation of consumers, one that can never have enough things (Twitchell). Twitchell refers to American material culture as a mallcondo...
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...Conspicuous Consumption and Capitalism in America Thorstein Veblen (1899) described in his “The Theory of the Leisure Class” that Americans’ sole purpose of lavish, wasteful expenditures (conspicuous consumption) is to established prestige. The priority in life is not only an economic one, but also the constant attainment over our fellow man, especially in the competition for social status through material goods. He claims that the leisure class is by custom exempt or excluded from the industrial occupations, and is reserved for certain employments; it is a rite of passage. This self-interest to acquire a status symbol is evident in a capitalist society as economic dominance, which he insinuates creates idleness and economic stagnation. Clearly, he failed to recognize the ever-changing American society where conspicuous consumption is the heart of capitalism. While it seems that Veblen might not regard self-interest in respect to conspicuous consumption as a contributing factor to economic growth, Adam Smith might see conspicuous consumption as a way of increasing self-interest, resulting in healthy competition in a free market, and promoting a strong and thriving economy. Perhaps the most conspicuous consumption example of the modern day American culture is the reality television show, MTV Cribs. The show gives viewers a glimpse of the luxurious lives of musicians, movie stars and athletes, and the ridiculous material wealth these celebrities possess. Normally...
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...MEDIA UND GSELLSCHAFT(media and society) 1) Imagined Community Benedict Andersen (politcal scientist) Without papers there is no such a scene. Nation is a community. Propaganda People who living big citi -monopolisierung -kanalisierung Most famaous propaganda poster comes from Russian Revoluation America kriegspropaganda Kalten Krieg 2)theory of propaganda a)selective perception and selection retention b)die meinungen der gruppe,zu der der empfanger gehört c)interpersnoal dissemination des kommunikationsinhaltes d)you have to convince important people opinio-formers kausalitat zwischen Konsum von Massenmedien und konkretem sozialem Verhalten ist kaum nachwiesbar. Bestenfalls können Korrelationen bewiesen werden, aber nicht Kausalitat. 3)culmination Theory George Gerbner (Media theoretiker) Mean world syndrome. People who watch a lot of tv have this syndrome. Law and Order Status Quo We can prove there is a mean world syndorme.people with this syndrome are convinced world is a bad place also they are convinced vice versa because police always wins. 8)Medieninhalt als ‘Text’ Marxisten, Strukturalisten und post-strukturalisten Roland Barthes Michel Foucault Jaques Derrida Slavoj Zizek Text is important 9) Der kulturelle Kode(key concept!) Symbols we learn and we use it culture. it helps us to communicate it can be anything. Sign, book... different culture -> different code. 10)Mytos Roland Barhes Cultural code are products of ideology...
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...What is demand? In economics, the law of demand is an economic law, which states that consumers buy more of a good when its price is lower and less when its price is higher (ceteris paribus). When the price of a product is increased then less will be demanded. Also is the same for the opposite, when the price of a product is decreased then more will be demanded. The Law of demand states that the quantity demanded and the price of a commodity are inversely related, other things remaining constant. That is, if the income of the consumer, prices of the related goods, and preferences of the consumer remain unchanged, then the change in quantity of good demanded by the consumer will be negatively correlated to the change in the price of the good. Assumptions Every law will have limitations or exceptions. While expressing the law of demand, the assumption is that other conditions of demand are unchanged. If they don't remain constant, the inverse relation may not hold well. In other words, it is assumed that the income and tastes of consumers and the prices of other commodities are constant. This law operates when the commodity’s price changes and all other prices and conditions do not change. The main assumptions are: * Habits, tastes and fashions remain constant. * Money, income of the consumer does not change. * Prices of other goods remain constant. * The commodity in question has no substitute or is not in competition by other goods. * The commodity is...
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...In “The Theory of Leisure Class,” Thorstein Veblen’s talks about conspicuous consumption. He explains how people show their class through the clothes that that they wear. The type of clothes that people wear show how much they do or do not work for a living. People’s appearance also shows how much other people work for them. The article, “In Defense of Our Wicked, Wicked Wicked Wicked Ways,” written in the New York Times, explains how conspicuous consumption in the present future is a positive outlet for people to express what type of lifestyle they want and can live. The writer describes how people now can enjoy luxurious things and pieces of the lifestyle through purchases. It gives the industrious class a chance to be or enjoy this of the predatory class for a certain amount of time. The writer also explains how the lower class an occasionally purchase and enjoy conspicuous leisure. People can buy opportunities for discounted leisure activities and enjoy in small increments. Conspicuous consumption also allows people who work a lot show their hard work publically and enjoy from it. I have conflicting views on conspicuous consumption. I believe it is unnecessary, a waste of money, and shows people how insecure you are about yourself. Wasting money on items feeds into the capitalistic society and prevents the unfortunate to prosper. I think people should invest any extra money they have on helping society like donating to charities, feeding/housing the homeless, helping...
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...Veblen felt that once the consumer purchased the required goods of a desired class and through conspicuous consumption demonstrated the ownership of these goods that the consumer was then consider by society to be a member of that class. Duesenberry agrees with Veblen to some extent but expands on Veblen’s theory in noting that in order to maintain standing within the class that the consumer must be in a dynamic state of increased spending to obtain an increasingly higher quantity and standard of goods in order to maintain status. As other members of the class increase discretionary spending class, consume superior goods and demonstrate the ownership of these goods, the standards of the class move upward. The required level of spending and...
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...On the 14th of October, hundreds and thousands of people from all around the world queued for hours just to purchase a gadget of the future – the iPhone 4S. “Outside the Apple store on Regent Street in London, a line of shoppers snaked down nearby Hanover Street ... [whilst] in Covent Garden at least 700 people were queuing (Mathis, 2011).” It makes one wonder how innovative this product really is to draw this much attention. What do consumers see in the iPhone? Is it about product viability, status enhancement or just another Apple product to tick off the list? “Consumer behaviour refers to the selection, purchase and consumption of goods and services for the satisfaction of their wants (Shah, 2010).” There are six main types of consumers in society, each with different roles. It is vital to examine the various functions of each type of consumer with regard to the iPhone. Several factors influence the type of the consumer and his/her consumption. These range from culture, social class, family, roles and status, age, occupation, economic situation, lifestyle and beliefs. Basically, consumers identify themselves within a particular group and act accordingly towards consumption and demand for innovation whilst considering the product life cycle. In order to determine the effect of the iPhone on consumers, a background of the product must be considered. The iPhone 4S is the most advanced piece of technology Apple has ever invented. It is an upgrade to the iPhone 4 and was released...
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...Economics Paper University of Phoenix ECO365 May 6, 2013 Economics is a tool that we use in our daily lives even if we don’t always realize it. As people we all have things that we want, and things that we need. This includes things like food, clothing, and shelter, but it is not limited to those things. In order to get those things, people have to spend money. The issue is that everything that people need and want costs money. More often than not, people do not have the money to do both so they have to decide which things are important for them to have right now. This does not only apply to families, but businesses as well. This paper will address different types of economics and some of the factors that contribute to its changes. Economics is “a social science that studies how individuals, governments, firms, and nations make choices on allocating scarce resources to satisfy unlimited wants.” Economics is broken down into microeconomics and macroeconomics. Microeconomics analyzes how firms and households make decisions about how they should spend their money respectively. Microeconomics focuses on a smaller scale, hence the prefix micro-. It looks at the basic economic theory of supply and demand which tells businesses how much of a certain product they should produce, and how much they should be charging for it. Macroeconomics on the other hand studies the whole economy which includes things like unemployment rate, national income, rate of growth, gross domestic product...
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...exist. There are a number of factors that show that the law of demand doesn’t apply. One exception is Giffen goods. According to Bannock (2003), “a Giffen good is a good where an increase in price of a basic item leads to an increase in demand.” The author also gives an example of the poor in nineteenth century and the price of bread where they still bought more bread despite its higher price. If inflation and high interest rates occur then money would also be an example of this due to an increase in demand making the price of money rise. Another exception is Veblen goods, which are types of luxury goods that are in demand because of the high prices asked for them. An example of these goods is jewelry (Diamonds), luxury cars (Tesla/Rolls Royce), luxury handbags (Michael Kors/Prada/Kate Spade). This type of good is wanted for the status and as these prices goes up so does the demand. Starbucks Coffee would be a Veblen good according to Piong due to its status-enhancing brand. Another factor is inelastic goods, which is when demand does not change even when prices change. An example of this would be necessary medication like insulin in which the price would have no effect on demand since a person would have to have it regardless of price. A rare painting like the Mona Lisa or Starry Night would be considered an inelastic good that demand would remain unchanged regardless of price since it was the only one produced. The final example would be gas since your demand wouldn’t change...
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... After serving as an apprentice when his vision improved, Winslow began to work the Midvale Steele Company. While at Midvale, Taylor discovered that “production efficiency in a shop or factory could be greatly enhanced by close observation of the individual worker…”, which became the foundation of scientific management. Scientific management “is a field directly concerned with efficiency” and could also be applied to “administrators in American government and constitutional systems”. Taylor’s theory focused on: the most efficient way for the worker to complete the task, the employer providing proper tools, and good incentives for employee performance that resulted in a “machinelike routine”, which increased productivity. Economist Thornstein Veblen believed that “in dealing with the development and functioning of firms, [he] greatly appreciates the suggested scientific organization of labour and workshops, since it looks capable of increasing technical and general efficiency.” However, Alfred Marshall, a critic of Taylor’s system believed that the “human brain and flexible production systems must exhibit the ability to change, evolve and create” and allows the workers to solve complex problems in an evolving work environment. In Chapter 1, the Robbins/Judge text introduces readers to the organizational behavior model that “stakes out its parameters, and identifies inputs, processes, and outcomes.” This model relates to Taylor’s scientific approach to analyze the work process....
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...Euro. J. History of Economic Thought 14:1 55 – 78 March 2007 Alfred Marshall’s critical analysis of scientific management* Katia Caldari The value of a machine to a business can be calculated on the basis of its efficiency for its immediate work. But the value of an employee must be estimated (. . .) with a view to the probable development of his capacities: and the difficulty of this task is increased by the conditions of modern business. (Marshall 1919: 350) The dependence of industrial leadership on individuality and creative faculty has not been greatly effected by the predominance of routine in staple manufacture. (Marshall Library Archive, Red Box 1) 1. Introduction In 1911, in America, F.W. Taylor published his famous book, Principles of Scientific Management, in which new principles of industrial organization are suggested and the advantages of an extreme division of labour and mechanization are stressed. Taylor’s theory of scientific management played a very important role in shaping the early twentieth century factory system, both in America and in Address for correspondence University of Padua, Italy; e-mail: katia.caldari@unipd.it * An earlier draft of this paper was presented at the History of Economics Society’s Annual Meeting, 4 – 7 July 2003, Duke University, Durham. I would like to thank all the participants to my section for their helpful comments, in particular James Henderson, Mary Morgan, Michel Que ´ and Malcolm Rutherford. For...
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