Less is More: The Case of Minimalist Luxury

50 Pages Posted: 10 Oct 2018 Last revised: 21 Nov 2022

See all articles by Z. Jessie Liu

Z. Jessie Liu

Johns Hopkins University - Carey Business School

Pinar Yildirim

University of Pennsylvania - The Wharton School

Z. John Zhang

University of Pennsylvania - The Wharton School - Department of Marketing

Date Written: September 16, 2018

Abstract

We show theoretically that when high-quality, low-price counterfeits exist and are visibly indistinguishable from authentic products, some wealthy may embrace “less is more,” or what we refer to as the minimalist luxury strategy, to signal their status. Specifically, these wealthy may purposefully restrain from consumption of luxury goods, or they sacrifice through “less” functional utility, a strategy that the rest are not willing to mimic, to separate themselves from the mimickers. Here, “less” allows some wealthy to stand out, thus enjoying “more” symbolic utility that the society bestows on their status. This minimalist luxury strategy is in sharp contrast to Veblen’s conspicuous consumption strategy, as well as to the maximalist luxury strategy proposed by Liu et al. (2022). We derive this minimalist luxury equilibrium and explore its managerial implications for the luxury goods industry.

Keywords: Luxury brands, Signaling, Conspicuous consumption, Counterfeits, Minimalism

Suggested Citation

Liu, Zhenqi and Yildirim, Pinar and Zhang, Z. John, Less is More: The Case of Minimalist Luxury (September 16, 2018). Available at SSRN: https://ssrn.com/abstract=3246729 or http://dx.doi.org/10.2139/ssrn.3246729

Zhenqi Liu

Johns Hopkins University - Carey Business School ( email )

100 International Drive
Baltimore, MD 21202
United States

Pinar Yildirim (Contact Author)

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Z. John Zhang

University of Pennsylvania - The Wharton School - Department of Marketing ( email )

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