L4, Conspicuous consumption. 40 good questions, nicely answered!

Q: Wiswede: What 3 stages can the overlapping functions of purchasing expensive goods be separated in?

1 object reward : a product itself works well 2 social reward: buying and using goods leads to social recognition and the envy of others 3 self-reward: buying and using goods makes us happy because it meets required standards and expectations.

Q: What did Kahneman say about choice and memory?

Kahneman : the differentiation between experience and memory clarifies that only one choice is established in memory from an endless number of experiences and this choice is either associated with positive or negative memories.

Q: What costs involved in producing a signal, according to costly signaling theory, guarantee reliability?

They take up energy, risks, time, and money. The handicap principle : the bigger the signal, thus more costly, the more attractive the signal is (or more reliable as you can say)

Q: What are the four requirements for a signal to be regarded as costly?

The signal must be: observable : perceiver must be able to perceive it hard to fake : costly associated with unobservable desirable individual quality : like good genes or good health yielding a fitness benefit to signaler : yield an adaptive /evolutionary benefit that woud increase likelihood of protection for example

Q: What is the difference between objective and relative status?

Objective status is based on set indicators and relative status is how you see yourself in relation to others; social comparison.

Wiswede: What 3 stages can the overlapping functions of purchasing expensive goods be separated in?

1 object reward: a product itself works well
2 social reward: buying and using goods leads to social recognition and the envy of others
3 self-reward: buying and using goods makes us happy because it meets required standards and expectations.

What did Kahneman say about choice and memory?

Kahneman: the differentiation between experience and memory clarifies that only one choice is established in memory from an endless number of experiences and this choice is either associated with positive or negative memories.

Why did social inequality become a prima interest in research?

The degree and variance of social inequality were of prime interest since this was regarded as the principle conflict of modern society.

Why are perceivers also very important when we are looking at conspicuous consumption? (give 2 reasons)

1. signallers and receivers should share the same beliefs about meaning, it only works if status is actually received as it is intended

2. conspicuous consumption only functions as a status-signalling strategy when it produces benefits to the sender (in comparison with the receiver).

What are adaptive benefits?

It is a reproductive benefit, that would increase the likelihood of protection, reproduction, mating etc

What is costly signaling theory and how is it related to conspicuous consumption?

Costly signaling theory is the display of costly behavior that functions as a signal of desirable qualities that produce adaptive benefits. The costs involved in producing the signal of behavior guarantee the reliability.

> Therefore, a signal in conspicuous consumption must be costly to fake to reach its intended purposes.

What costs involved in producing a signal, according to costly signaling theory, guarantee reliability?

They take up energy, risks, time, and money.
The handicap principle: the bigger the signal, thus more costly, the more attractive the signal is (or more reliable as you can say)

What two levels can we distinguish within status enhancing traits and strategies?

Context(-dependent) - based on the context in which the sign happens, achievements for example
Universal: physical attractiveness, wealth etc.

What are the four requirements for a signal to be regarded as costly?

The signal must be:

observable: perceiver must be able to perceive it
hard to fake: costly
associated with unobservable desirable individual quality: like good genes or good health
yielding a fitness benefit to signaler: yield an adaptive /evolutionary benefit that woud increase likelihood of protection for example

What is the difference between objective and relative status?

Objective status is based on set indicators and relative status is how you see yourself in relation to others; social comparison.

What are 5 perceptions can a sender evoke by wearing branded clothing? (found in the article of Nelissen)

1 wealth and status
(study 1 questionnaire)

2 increased compliance with sender
(study 2 requests on the streets logo vs no logo)

3 increased preference for sender and considered more suitable (study 3 job interviews)

4 it provides financial benefits to the sender
(study 4 collecting money for 'hartstichting')

5 It overall yields a more favourable treatment, which yields fitness benefit

What are 5 perceptions can a sender evoke by wearing branded clothing? (found in the article of Nelissen)

1 wealth and status
(study 1 questionnaire)

2 increased compliance with sender
(study 2 requests on the streets logo vs no logo)

3 increased preference for sender and considered more suitable (study 3 job interviews)

4 it provides financial benefits to the sender
(study 4 collecting money for 'hartstichting')

5 It overall yields a more favourable treatment, which yields fitness benefit

What is conspicuous consumption and what is the driving force behind it?

Consumption as a signal for wealth, high income and social status.
(NOT necessarily possession of material objects!)

It is driven by non-utilitarian motives

What are arguments for the higher preference for meat and higher levels of consumption of meat, in groups with a lower Social economic position (SEP)?

As meat symbolizes status they think they lack, but desire. It is their goal to obtain status and also perceive status, whilst the objective status does not match.

>> psychological theory of compensation: individuals are motivated to obtain resources to make up for resources they perceive to lack.

However, vegan could also be seen as a costly signal since it is expensive and considered pro social, but it must be observable to others!

How could altruism be seen as a costly signal?

For example, showing others that you are voluntarily willing to incur costs of owning a product that benefits a group/society but may be inferior for personal use. You incur the costs to show that you are prosocial and not self-centred.

E.g. you show that you are willing to reduce climate change and incur costs, even though it might be inferior for personal use

Functional benefits: seen as cooperative and helpful, more desirable as a person, status for self-sacrifice.

What are social constructions according to Veblen?

The creation of preferences and taste. This means that components of luxury become components of beauty.

How did Veblen describe the leisure class?

The leisure class is a parasitical group/class of the idle rich, of which all its members are driven by motives to ‘maximize money’ and to show off their wealth to others through consumption.

Veblen: What do purchases of expensive and rare goods demonstrate?

They should demonstrate the economic position and social power of the owners. Consumption patterns demonstrate social position.

What distinction between function of goods has Hirsch made?

A differentiation between goods just for purpose of consuming and goods which serve primarily to underline or express the social function of the owners. This last group of goods is called positional goods.

What is the main function of positional goods? (defined by Hirsch)

Their possession acts as a social signal and they express social class associations.

What are the three analytical pillars Bourdieu used? Also explain what social fields are.

Habitus
Capital
Social fields

Social fields are autonomous, and structured by a variety of social figurations and concentrations of different capital, which give sources of power and prestige to individual actors.
The category of the field acts as a location for the existence of social action and behaviour.

Bourdieu: What influence do social fields have on individuals?

Individual actors or social groups are defined by their relative positions within these fields. And individual’s place in society is thus dependent on the amount of social, cultural and symbolic capital they possess.

Define Bourdieu's concept; Capital.

Capital gives access to material resources and other more cultural and social resources.

1 economic capital, wealth and all monetary resources.

2 social capital: networks of relationships, which could improve life chances and access to resources

3 cultural capital: exists in 3 forms – embodied (dispositions of an individual), objectified (objects), institutionalised (education)

How are habitus and forms of capital related?

Habitus becomes a form of cultural and social reproduction, since the building of social networks and the appropriation of cultural aspects builds permanent behaviour and dispositions used in life.

''Taste is a kind of social grammar which we use in a natural way without explicit rules. Tastes and preferences are socially constructed, depending ong the context and culture.'' What is meant by this?

Look it up

What are some other recent trends in consumption?

The greening of society; thinking about which purchase practices are becoming ecologically and politically influenced – in a moralized market consumers reject ethically questionable, harmful products (“shopping for a better world”).

“The lonely crowd”; a societally standardized, collectively individualized form of existence.

What will horizontal stratification show in society?

That we can no longer assume that several individuals receiving the same income will configure their consumption in the same way – there is no standardized consumption packet anymore.

Veblen was one of the first thinkers to highlight social and psychological dimensions in economic principles, which have become common knowledge in recent marketing discourse. Those purchases should demonstrate the economic position and social power of the owners of expensive and rare goods. Wiswede (2000, p. 25) defined these overlapping functions as three separate stages, name them and shortly explain.

- Object reward (a product works particularly well)

- Social reward (buying and using goods leads to social recognition and the envy of others)

- Self-reward (buying and using goods makes us happy because it meets required standards and expectations)

How can we characterize contemporary consumer culture?

It can be characterized by its primacy on material expenditure as a means of establishing and defining social relationships.

How do the 4 criteria (that need to be met to make a signal costly) fit luxury brands?

1 observable: designed to be visible
2 costly to fake: expensive items
3 unobservable, desirable: status and wealth
4 fitness benefit

Describe the concept of conspicuous consumption.

Buying expensive goods in order to display wealth and high income (when consuming goods becomes an indicator of inclusion and exclusion, a demand develops in order to present this purchase as a social signal, a ''conspicuous consumption''.

Original wording:
'Economic activities driven by non-utilitarian, even impractical, motives that are more akin to tribal and prehistoric behavior than rational economics.'

How did Veblen see the business class (bankers, brokers, lawyers and managers)?

The business class serves in Veblen's framework as the ''leisure class'', a parasitical social group primarily driven to accumulate money and to highlight its wealth through visible consumption.

According to the book (chapter 5), Veblen acted as an early representative of institutionalist thinking. What does this institutionalist thinking entail?

Here economic procedures do not take place automatically and human activities do not work according to the principles of the homo economicus that hand needs are determined universally and quasi genetically. On the contrary, an ''own logic'' defines the dynamic of socio-emotional needs and social contexts. In particular, Veblen descried the creation of preferences and tase as social constructions.

Give a short explanation of social constructs/construction.

Briefly, social construction (SC) assumes that people construct (i.e., create, make, invent) their understandings of the world and the meanings they give to encounters with others, or various products they or others create; SC also assumes that they do this jointly, in coordination with others, rather than individually.

Fred Hirsch (1976) made a differentiation between goods just for purpose of consuming them and goods which serve primarily to underline or express the social function of the owners, always in relation to others. What can you tell about the latter group of products?

This last group of products was termed positional goods.

They exist because of a socio-binary logic of “being able to have” and “not being able to have” and their consequences on social organization and prestige. To put it another way: commodities and their possession act as social signals as well as express social class associations similar to Goffman (1979 [1951]).

Bourdieu:
An individual's place within society is, hence, not necessarily defined by social class alone; rather it largely depends on the amount of social, cultural and symbolic capital they possess. What can you tell about (social) fields in this context?

The category of the field acts as location for the existence of social action and behavior, including subfields such as the arts, the economy, law, politics and literature. Social fields are structured by a variety of social figurations and poles with concentrations of different capital.

What does Schwartz describe with the “paradox of choices”?

It says that people are not happier with more and more choices. Always increasing choices may paralyse people and make them unhappy and incapable of acting.

What are the four criteria for any behavioral strategy to be seen as a costly signal?

The signal mus be easily observable
The signal must be hard to fake (because of its associated costs)
The signal must be associated with an unobservable, yet desirable, individual quality, such as good genes, physical health or other.
The signal must ultimately yield a fitness benefit (add an example or good def. After lecture)

What were the main findings of the article 'social benefits of luxury brands as costly signals of wealth and status (Nelissen and Meijers, 2011)?

Write this after lecture as the main findings will probably be discussed there!

Why did social inequality become a prima interest in economic/sociological research?

The degree and variance of social inequality were of prime interest since this was regarded as the principle conflict of modern societies.

L4, Conspicuous consumption

40 important questions on L4, Conspicuous consumption

Wiswede: What 3 stages can the overlapping functions of purchasing expensive goods be separated in?

What did Kahneman say about choice and memory?

Why did social inequality become a prima interest in research?

Why are perceivers also very important when we are looking at conspicuous consumption? (give 2 reasons)

What are adaptive benefits?

What is costly signaling theory and how is it related to conspicuous consumption?

What costs involved in producing a signal, according to costly signaling theory, guarantee reliability?

What two levels can we distinguish within status enhancing traits and strategies?

What are the four requirements for a signal to be regarded as costly?

What is the difference between objective and relative status?

What are 5 perceptions can a sender evoke by wearing branded clothing? (found in the article of Nelissen)

What are 5 perceptions can a sender evoke by wearing branded clothing? (found in the article of Nelissen)

What is conspicuous consumption and what is the driving force behind it?

What are arguments for the higher preference for meat and higher levels of consumption of meat, in groups with a lower Social economic position (SEP)?

How could altruism be seen as a costly signal?

What are social constructions according to Veblen?

How did Veblen describe the leisure class?

Veblen: What do purchases of expensive and rare goods demonstrate?

What distinction between function of goods has Hirsch made?

What is the main function of positional goods? (defined by Hirsch)

What are the three analytical pillars Bourdieu used? Also explain what social fields are.

Bourdieu: What influence do social fields have on individuals?

Define Bourdieu's concept; Capital.

How are habitus and forms of capital related?

''Taste is a kind of social grammar which we use in a natural way without explicit rules. Tastes and preferences are socially constructed, depending ong the context and culture.'' What is meant by this?

What are some other recent trends in consumption?

What will horizontal stratification show in society?

How can we characterize contemporary consumer culture?

How do the 4 criteria (that need to be met to make a signal costly) fit luxury brands?

Describe the concept of conspicuous consumption.

How did Veblen see the business class (bankers, brokers, lawyers and managers)?

According to the book (chapter 5), Veblen acted as an early representative of institutionalist thinking. What does this institutionalist thinking entail?

Give a short explanation of social constructs/construction.

Fred Hirsch (1976) made a differentiation between goods just for purpose of consuming them and goods which serve primarily to underline or express the social function of the owners, always in relation to others. What can you tell about the latter group of products?

Bourdieu:An individual's place within society is, hence, not necessarily defined by social class alone; rather it largely depends on the amount of social, cultural and symbolic capital they possess. What can you tell about (social) fields in this context?

What does Schwartz describe with the “paradox of choices”?

What are the four criteria for any behavioral strategy to be seen as a costly signal?

What were the main findings of the article 'social benefits of luxury brands as costly signals of wealth and status (Nelissen and Meijers, 2011)?

Why did social inequality become a prima interest in economic/sociological research?

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Bourdieu:
An individual's place within society is, hence, not necessarily defined by social class alone; rather it largely depends on the amount of social, cultural and symbolic capital they possess. What can you tell about (social) fields in this context?