The bandwagon, Snob, and Veblen Effects

Length: 1107 words (3.2 double-spaced pages)
Rating: Excellent
Open Document
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Text Preview

More ↓

Continue reading...

Open Document

It is also important to remember that in realizing the bandwagon, snob, and Veblen effects, the basic assumption that the consumers' consumption behavior is independent of the consumption of others, must be ignored.

The bandwagon effect is seen in cases where individuals are trying to "fit in". This effect is shown when the demand of a certain good is increased, based on the assumption or knowledge that other consumers are also consuming that same good. This effect is most easily described using the example of fashion or clothing. People most often like to have the latest fashions, and wear what is in style. They look to people whom they admire, or see what their favorite celebrities, or even their friends are wearing. The individual's desire (demand) to also own and wear the latest fashions will be increased, because they have observed those fashions as what is popular. This is a very simple way to explain the bandwagon effect, and it is an example that most people have witnessed or experienced themselves. The graph (figure 1) displaying the bandwagon effect on the demand curves of several individuals and the market demand, shows that the market demand curve is very elastic. That is, it is sensitive to price change, and also to the quantity demanded. This means that if many people are consuming a good the demand is affect greater than if less people were consuming the good. To further clarify, take the example of attending college. In an environment where most of an individual's peers are going to attend college, the individual will see college as the right thing to do, and also attend college to be like his peers. However, in an environment where most of an individual's peers are not going to attend college, the individual will have a decreased demand for college, and is unlikely to attend. This brings up the next point concerning the bandwagon effect; the taboo effect. Essentially the taboo effect displays the same type of consumer behavior, but in the opposite direction. Therefore, if one notices that a group is not consuming a certain good, that one will see the good as a "social taboo" and also not consume the good. The social taboo effect on demand is a special case. In the graph (figure 2) the demand curve crosses the x-axis into negative territory. This is implying that the consumer would have to be compensated, or paid to even consider consuming a certain good.

How to Cite this Page

MLA Citation:
"The bandwagon, Snob, and Veblen Effects." 24 Sep 2017
Title Length Color Rating  
Analyzing Thorstein Veblen's The Theory of the Leisure Class Essay - In 1899 Thorstein Veblen wrote The Theory of the Leisure Class: An Economic Study of Institutions. In this work, Veblen presented critical thinking that pertains to people’s habits and their related social norms. He explores the way certain people disregard the divisions that exist within the social system, while subsequently emulating certain aspects of the leisure class in an effort to present an image of higher social status. He also presented the theory of conspicuous consumption, which refers to an instance when a person can fulfill their needs by purchasing a product at a lower cost that is equal in quality and function to its more expensive counterpart; however, said person chooses...   [tags: conspicuous consuption] 856 words
(2.4 pages)
Better Essays [preview]
The Problems with Bandwagon Patriotism Essay - The Problems with Bandwagon Patriotism I’ll admit it, I’m American. I’m an American and I admit, I enjoy it very thoroughly. I enjoy having the right to a free education, choice in who rules over me (who rules, who cares. pun intended), and the right to walk around the streets at three a.m. because I can. But I do not consider myself patriotic, in any way, sense or fashion. The astounding number of Americans nowadays who consider themselves patriotic can overwhelm the small few who were there for America before 9/11....   [tags: Politics Political Essays] 1757 words
(5 pages)
Powerful Essays [preview]
Analysis of Veblen’s The Theory of Business Enterprise Essay - 1. Introduction In the field of economics much has been said on the nature of commerce organizations and their role in the economy, but most mainstream approaches fall short in their attempts to form a realistic model of the economy. The standard view of business is that of the firm, a homogeneous entity that produces homogeneous widgets with the use of perfectly substitutable homogeneous capital and labor; occasionally discussions will mention “The Entrepreneur”, an all-knowing master coordinator....   [tags: economic analysis]
:: 4 Works Cited
1531 words
(4.4 pages)
Powerful Essays [preview]
Biotechnology Companies Pushing Farmers to Jump on the GM Bandwagon Essay - ... To make matters worse, yields have also fallen sharply as a result of the spike in pest attacks, devastating farmers financially. 25% of 1000 sampled farmers in a Chinese survey maintained that lesser yields were observed in Bt cotton while more than half agree that production costs had remained consistent even after the adoption of Bt cotton due to the higher cost of the GM seed (Zhao, Ho & Azadi, 2011). In sum, although GM crops possess the potential to generate increased profits for farmers due to decreased pesticide usage, the economic benefits would eventually be eroded by the emergence of pest resistance and secondary pests in the long run....   [tags: pesticides, crops, economic] 605 words
(1.7 pages)
Research Papers [preview]
Learning Disabilities and Political Correctness Essay - There are some groups and organizations like “Abilities,” a Canadian lifestyle magazine for disabled people, have provided some guidelines on the correct terminology to be used for the individuals with disabilities. Most of this information makes sense and is easy for a writer to implement, but sometimes individuals or organizations can go overboard in their demands for political correctness. There are several guiding principles that writers can use to determine which terminology will be acceptable to most people who have or deal with people with disabilities (Fallotz, 2009)....   [tags: genetic fallacy, learning, snob approach]
:: 4 Works Cited
985 words
(2.8 pages)
Better Essays [preview]
What Makes Zombies So Popluar? Essay - There is no denying that zombies are popular they are popping up everywhere from movies to video games and more. But why, what lies behind this braindead form of entertainment. Many of us just carry about our lives and never truly ask ourselves what makes zombies popular, what do they stand for, what are they all about. Zombies are a metaphor, they are humans who have lost what gives us dominance over the animal world, our powerful brain. Throughout the zombie narratives the authors argued that zombies represent man who has lost motivation, to achieve and how the unmotivated form bandwagons that many weak minded jump onto....   [tags: metaphoe, motivation, bandwagon] 1245 words
(3.6 pages)
Strong Essays [preview]
Essay on Advertisings' Subliminal Messages - Fallacious reasoning when used in regards to marketing, and better yet adverting. Is when one forms a strong, one-sided opinion based on their observation. Sometimes the reasoning can present a strong message; such as that from a dogmatic viewpoint where only one true choice exist within the mind of the observer. Though not all fallacious reasoning are extreme as the fallacious reasoning Dogmatism. Fallacious reasoning is used a lot in today’s advertising to influence people in society’s thinking, social atmospheres, and outlooks....   [tags: Dogmatism, Bandwagon, Sentimental Appeal] 1309 words
(3.7 pages)
Better Essays [preview]
The Effects of Global Warming Essay examples - Global Warming is a condition caused by greenhouse gases and human activities. The increased concentration of greenhouse gases due to activities such as deforestation and fossil fuel burning is causing the Earth’s atmosphere and oceans to warm up. As a result of this, global warming has some serious effects in the shape of extreme weather, species extinctions, and rising sea levels. These effects can contribute to the changes that are taking place all over the world, most of which are dangerous enough to pose a threat to the survival of life on Earth in the future....   [tags: Causes and Effects]
:: 5 Works Cited
671 words
(1.9 pages)
Better Essays [preview]
Essay on Effects of Automobiles - Effects of Automobiles Think for a second here, what do you use almost every day to get to where you need to go. An automobile is probably what you are thinking of because just about everyone has one. Automobiles have become so common; nine out of every ten families in the United States own some type of vehicle. Now Imagine going through everyday life without one it would be nearly impossible. Automobiles have had a very positive impact on the world and on many people’s lives. However they have also taken quite a negative effect on the world and in life....   [tags: Negative Effects, Positive Effects, Vehicles]
:: 7 Works Cited
1302 words
(3.7 pages)
Strong Essays [preview]
Thorstein Veblen: Short Bio & Economic Theories & Ideas Essay - Thorstein Bunde Veblen (1857-1929) was born in Cato, Wisconsin. He attended Carleton College, as well as the universities of John Hopkins, Yale, and Cornell. He taught political economy and economics from 1892 to 1918 at the University of Chicago, Stanford University, and the University of Misssouri. He retired in 1926 after working for seven years at New York City’s New School for Social Research. He was noted for his significant analysis of our economic system and, by Mark Blaug, for his mastery of the art of satire.# Veblen went against the modern economic beliefs of his day....   [tags: essays research papers] 495 words
(1.4 pages)
Good Essays [preview]

Related Searches

This specific case may be beyond the scope of the ECON 218 course; however, it is important to understand. What is important to take away is the bandwagon effect, which is the increased demand due to others' consumption of a certain good ("mass motivation").
From the name one can determine what the snob effect implies. The snob effect is seen when an individual's demand is decreased due to the assumption or knowledge that others are consuming the good. Therefore, the individual consumer's demand is negatively correlated with the market demand. One way to think about this can be to say it is the "opposite" (but completely symmetrical) of the bandwagon effect. For example, if you notice that many people are driving "Ford" cars, due to the snob effect, your desire (demand) to drive a "Ford" car will decrease. Thus, you will likely drive a "Chevy" car, in order to be exclusive or unlike the crowd. The graph (figure 3) showing the snob effect, contains demand curves that are independent of the snob effect, and the market demand in response to the snob effect. The demand curve displaying the snob effect is very inelastic compared to the individual demand curves. An inelastic demand curve in this situation is implies that a change in price or consumption will not have a great effect on an individual who is displaying the snob effect. Note that the demand in the snob effect is referring to buyers' demand.
Finally, the Veblen effect, which is named after the scholar who came up with the theory, is form of irrational consumption. The Veblen effect is the most complex of the three "nonfunctional" external effects on demand. It affects the sociological or psychological behavior of the consumer. A basic summary of the Veblen effect might be when a consumer's demand (or consumption) of a certain good is increased when the price also is increased. This is against traditional theory of rationality. However, the consumer perceives that the good brings a higher utility at a higher price. For instance, say there are two pairs of very similar shoes in a store; everything is the same about the shoes except one pair has a small "Jordan" symbol on it. Also, the pair of shoes with the "Jordan" symbol has a price that is significantly higher than the other pair of similar shoes. A consumer who buys the shoes with the "Jordan" symbol is displaying the Veblen effect. They are willing to pay a much higher price for essentially the same product, because they think they will get a higher utility. This is just one example; there could be many more examples where consumers are overspending on products because they hope to get a higher utility from having the "cool" thing. This is irrational consumption and spurs from the individual hoping to "show off" that they have a more expensive product, even though the product may serve the same function of a much cheaper product. The graphs (figure 5 A,B,C) show the demand curves of a consumer under the Veblen effect. Notice that the shape of the demand curve is not consistent. It is less elastic than otherwise, and some portions of it may have a positive slope. The Veblen effect is based on irrational or conspicuous consumption.
This paper written by Leibenstein in 1950, describes the external effects on demand; the bandwagon, snob, and Veblen effects extremely well. Through examples and graphs the author clearly describes consumer behavior and consumer demand as it relates to sociology, welfare economics, and pure theory. One thing that must be pointed out here is that in each of the three cases, individuals are still bound by the income constraint. These theories describe consumers' demand and behavior, but in some cases the price constraints will limit the consumer's choices. In conclusion, next time you see people running to the mall to buy the latest fashion, or going out of their way to get the most exclusive product that no one else has, or overspending to get a "cool" name brand product, you will know the causes of these behaviors. The bandwagon effect, the snob effect, and the Veblen effect, respectively.

Return to