Less is More: The Case of Minimalist Luxury
50 Pages Posted: 10 Oct 2018 Last revised: 21 Nov 2022
Date Written: September 16, 2018
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
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