The Veblen effect and (in)conspicuous consumption - a state of the art article

Pricing decisions become increasingly important for luxury companies in order to create new growth paths without jeopardising their brands' exclusivity. However, the luxury-specific phenomenon of the Veblen effect, where an increase in price leads to an increase in demand, and its underlying purchase motivation of conspicuous consumption have not received any special attention in the academic literature. In past research the Veblen effect seems to even have been forgotten and has been dissociated from the concept of conspicuous consumption and the rise of inconspicuous consumption has not been addressed for this topic. Therefore, this comprehensive review and analysis of the relevant literature provides an overview of the state of the art literature and synthesises results in order to draw conclusions about the general existence of the Veblen effect and its influencing factors. According to gaps in the literature, the authors propose future research directions to improve the understanding of the Veblen effect and its applicability in the luxury brand management context.