Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
Why Your Brain Treats a Price Increase as a Quality Signal
Episode 108 of Behavioral Economics with Fexingo. Lucas and Luna explore the Veblen effect — why higher prices can actually increase demand for certain goods. They break down the 2024 Hermès Birkin price hike: a 12 percent increase that led to a 7 percent rise in waitlist requests. They discuss signaling theory, the difference between luxury and necessity goods, and how brands like Rolex and Supreme have used scarcity pricing to reinforce status. The episode also covers the psychological mechanism of conspicuous consumption, the role of social comparison, and why a $10,000 handbag can feel…
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