The Price of Exclusivity
7 August 2008 at 12:17 am Peter G. Klein 2 comments
| Peter Klein |
Whenever I fly first or business class — not nearly often enough — it’s usually an upgrade, and I feel sorry for the rich guys around me who shelled out serious coin partly to avoid sitting next to schmucks like me. Perhaps you’ve been to an expensive restaurant where the food isn’t that good, but the clientele is made up of people who can afford that kind of place and you enjoy the exclusivity. And you’ve heard stories about first-class train compartments that are identical to their second-class counterparts, only more expensive, catering to people who like to be surrounded by other rich people.
Here’s a cool modern example of this phenomenon: a $999 iPhone application that does nothing but announce to the world that you can afford a $999 iPhone application (via Josh). Talk about a separating equilibrium!
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Organizations and Markets 
1.
Rebecca | 7 August 2008 at 5:17 am
This is brilliant! But hey: where there is demand… it’s like the £63 a bottle still water they launched here in the UK a while back. If someone is dumb enough to buy it, then someone should be smart enough to sell it.
Although I will add that if you ever took a train in Italy during the summer, you would not mock paying a bit more for a first class ticket!
2.
Emily | 18 August 2008 at 11:15 am
I saw this last week on the New York Times website. The sad part about this is I actually know people who would buy it. Talk about conspicuous consumption. I wonder if Paris Hilton has this app yet.