Demand for veblen goods increases as price increases. Certain luxury goods aren’t pure veblen goods, at least when looking at their literal dollar price. Instead, as price increases demand follows a kind of inverted U-curve.
Certain luxury goods, like Birkin bags, and certain watches, deliberately suppress the prices of their most high end products. Instead, they achieve scarcity through means other than price. They also crack down on resellers. This makes connections with the brand, not the literal price, the actual barrier to ownership
- This is akin to the signalling value of the gift economy.
You can tell the price is artificially supressed by looking at the instant resale price.
This lets owners of these goods signal something more scarce than mere wealth, it lets them signal connections with prestige.
There’s a question of why this doesn’t seem to occur with, e.g. superyachts or makers of exclusively high-end sports cars. This is because they don’t also sell to a more entry-level consumer. There’s no point in a maker of superyachts giving away their yachts for below the market clearing price, for two reasons. First, even if this makes the brand associated with non-monetary exclusivity, this can’t be parlayed into monetary transactions for their more low-end products, since they don’t have a wide enough base of entry-level consumers of their goods. Second, it might just be that margins have to be tighter on the products they make for some reason? Hermes still doesn’t lose money on it’s birkins afaik. But maybe to halve the price of a superyacht you would be deeply in the red.
This is probably all a special case of old money vs new money signalling, where old money looks for things other than literal price to discriminate based upon, e.g. distinctions of taste. This here is just the supply-side story for why some profit-motivated suppliers would want to provide to this old-money clientele.
What class of goods (or services?) have relatively low list prices, despite very high demand? Think of sneakers having an immediate resale value much high than their list price. (What’s the analogous sign for services?) Obviously there’s some connection with conspicuous consumption, but what exactly is the connection?