Snob effect

The snob effect (of English snob. Busybody ) is a price effect and is one of the abnormal demand behavior. This effect occurs whenever the consumer only from a certain exclusivity heed the goods in and out in addition assume that the item is not purchased from a broad group of consumers (English: snob - value). While the price is rather unimportant for the purchasing decision; the decisive factor is the anticipated behavior of other consumers.

Normally, the microeconomic household theory assumes that the agents act completely independently. When snob effect, however, is a function of the consumer decisions available. That is, a specific set of consumers buying from a good more if they know that another group of consumers of the good buys less. For example, acquires a snob a particular car only if he knows that only he or a few others will have this car. The reason for the purchase decision of the snob is not general to be sought in the price, even if ensures the desired exclusivity for most of the snobs price. The snob effect can be seen as the opposite of the idler effect ( also Bandwagon effect).

Looking at the corresponding demand function, the remote volume of goods increases with the increase of the price. If the price is increased further, however, as the demand behavior tilts back, because the consumer may not be willing to pay the high price.

The resulting demand elasticity is also called inverse elasticity of demand.

Definition of the term for conspicuous consumption and Veblen effect

Because of its somewhat misleading name of the snob effect is common ( also called Veblen effect) with the conspicuous consumption confused. When conspicuous consumption goods are preferred because of their higher price; this type of consumption aims to show what you can afford, to thereby define the social status. The higher price is therefore directly responsible for the higher demand. When snob effect, however, the uniqueness of the consumed good is the decisive factor - the price has it only indirect influence. Illustrate the difference can be the example of the originally non-conformist fashion punks: In their demand behavior, the punks behaved after the snob effect - they aimed to look different as possible. With a high price this fashion, however, had nothing to do.

• Microeconomics
• Consumption