explaining conspicuous consumption 19
others. Some of this variance may be due to personality differences be-
tween individuals (Frank 1985 a). This psychological dimension is not
easily applicable to international relations, however. Alternatively, differ-
ences in sensitivity to status considerations may stem from structural rea-
sons, that is, the position of actors in the social hierarchy and the respec-
tive trajectories of their social mobility. Ceteris paribus, we would expect
actors who experience status anxiety to assign greater value to secondary
utility. A sudden decline or improvement in actors’ social fortunes can
lead to such anxiety. Thus, for example, Suzuki ( 2008 ) finds that China’s
and Japan’s adoption of prosocial policies — a form of conspicuous con-
sumption — is driven by their position as “frustrated great powers.” Both
countries are trying to use their consumption in order to alleviate their
frustration with their international social standing.
If a good is consumed solely for its signaling value, it is considered a
“pure Veblen good,” one that “contributes to the welfare of any one indi-
vidual only in so far as it affects that individual’s relative consumption of the
good; it provides no utility of its own accord” (Eaton and Eswaran 2009 ,
1088 ). Empirically, it is much easier to identify conspicuous consumption
in cases that approximate “pure Veblen goods” when the primary utility
is nonexistent, or virtually so. The Brazilian aircraft carrier may be such a
case. While it is true that extreme cases offer the most compelling exam-
ples of conspicuous consumption, we must be careful not to discount the
importance of secondary utility in a wider set of decisions where primary
utility is still present.
Consumption Externalities: Bandwagoners, Snobs, and
Conspicuous Consumers
When it comes to conspicuous consumption, an increase in price can be-
come an advantage rather than a deterrent, contrary to the expectations
of supply and demand. While most countries are able to afford small naval
vessels, only a major power is able to purchase and maintain a carrier.
Thus, the very fact that the carrier is expensive is part of its attraction.
Morgenstern was among the first economists to formally acknowledge
this shortcoming in demand theory: certain goods are more desirable as
their price increases. He chose to tackle this anomaly by focusing on the
problem of additivity of demand curves. In order to reach a collective
demand curve for a certain good, we need to aggregate individual curves.
However, as Morgenstern notes, individual curves are only additive if we
