The Economics of Social Status

Status as currency. The whole thing is worth a read. I liked this aside on public speaking, which also connects with live music and standup comedy and other types of performance, and why they’re scary:

“Bidding for status” is another activity with economic characteristics. The nature of a bid is that it sets a particular ‘price’ that can be accepted or rejected. Robin Hanson suspects that speaking in public is a way of bidding for status. The very act of standing in front of a group and speaking authoritatively represents a claim to relatively high status. If you speak on behalf of the group – i.e., making statements that summarize the group’s position or commit the group to a course of action — then you’re claiming even higher status. These bids can either be accepted by the group (if they show approval or rapt attention, and let you continue to speak) or rejected (if they show disapproval, interrupt you, ignore you, or boo you off stage).

The dance floor never lies.

The Economics of Social Status

Why techies don’t buy contemporary art | Felix Salmon

This, for me, is the real reason that tech types don’t buy art: they’re busy investing in each other’s startups instead. Being an early-stage investor is in many ways just like being a contemporary art collector: you’re very unlikely to make money at it, even though the potential and anecdotal returns can be enormous; and it’s used in large part as a way of supporting your friends and being seen as being important within a very small world.

Why techies don’t buy contemporary art | Felix Salmon

Bruce Schneier on Trust | FiveBooks | The Browser

Self-deception makes us better at deception. For example, there is value in my being able to deceive you into thinking I am stronger than I really am. You’re less likely to pick a fight with me, I’m more likely to win a dominance struggle without fighting, and so on. I am better able to bluff you if I actually believe I am stronger than I really am. So we deceive ourselves in order to be better able to deceive others.

Filed under: delusions.

Bruce Schneier on Trust | FiveBooks | The Browser

Hacking the Used Car Purchase « carsabi.

Hack #3: Buy Luxury Later. If you’re broke like us but still really like performance and leather interiors, consider getting a luxury car that’s 5-6 years old. More luxury owners want newer models than older ones leading to a pretty steep depreciation for the first few years; the average new E320 loses about $12k per year no matter the mileage (112 datapoints). Compare this to the depreciation curve for a Camry: the car holds value like people *want* to drive it into the ground. Crazy! (1,523 datapoints).

Overcoming Bias : ‘Never Settle’ Is A Brag

Robin Hanson on Steve Jobs’ commencement speech:

Now notice: doing what you love, and never settling until you find it, is a costly signal of your career prospects. Since following this advice tends to go better for really capable people, they pay a smaller price for following it. So endorsing this strategy in a way that makes you more likely to follow it is a way to signal your status.

It sure feels good to tell people that you think it is important to “do what you love”; and doing so signals your status. You are in effect bragging. Don’t you think there might be some relation between these two facts?

Megan McArdle’s follow-up:

The problem is, the people who give these sorts of speeches are the outliers: the folks who have made a name for themselves in some very challenging, competitive, and high-status field. No one ever brings in the regional sales manager for a medical supplies firm to say, “Yeah, I didn’t get to be CEO. But I wake up happy most mornings, my kids are great, and my golf game gets better every year.”

She continues, talking about talking about her own awesome job with aspiring young folk:

Usually, what I tell them next is that it’s not a tragedy if they don’t do what they thought they wanted to do at 22; that they have more time than they think to figure out “what they want to do with the rest of their lives”; and that the world outside of school and words is more interesting than they probably suspect.

Similarly, Will Wilkinson on commencement advice:

“Find what you love and never settle for less” is an excellent recipe for frustration and poverty. “Reconcile yourself to the limits of your talent and temperament and find the most satisfactory compromise between what you love to do and what you need to do to feed your children” is rather less stirring, but it’s much better advice.

Overcoming Bias : ‘Never Settle’ Is A Brag

Fake Prada Bags: Why counterfeits help high-end designers sell more of the real thing.

austinkleon:

murketing:

When most people think about the effect of counterfeits on legitimate brands—and when brands themselves litigate against counterfeiters—they focus on the “business stealing” effect: Every fake Prada handbag represents a lost sale for Prada. A dirty little secret is that Prada rip-offs can also function as free advertising for real Prada handbags—partly by signaling the brand’s popularity, but, less obviously, by creating what MIT marketing professor Renee Richardson Gosline has described as a “gateway” product. For her doctoral thesis, Gosline immersed herself in the counterfeit “purse parties” of upper-middle-class moms. She found that her subjects formed attachments to their phony Vuittons and came to crave the real thing when, inevitably, they found the stitches falling apart on their cheap knockoffs. Within a couple of years, more than half of the women—many of whom had never fancied themselves consumers of $1,300 purses—abandoned their counterfeits for authentic items.

Fascinating.

I imagine it’s hard to let go of a that signaling power, especially when, over the time of ownership, you’ve begun to see yourself less as a sneaky-counterfeit-buyer and more as a apparent-Prada-owner. See also Why Elite Shoppers Eschew Logos.

Fake Prada Bags: Why counterfeits help high-end designers sell more of the real thing.

The New Inquiry: Comfortably Alone

Shyness had made me so deficient in empathic experience that I could only view social life in terms of risk rather than opportunity. The best way to manage that risk, I thought, was to be unapproachable but legibly fascinating at a distance, to present myself as an object to be read but with a message that’s inscrutable and fleeting, one that could convey the complexity of the real me without reducing it to something superficial. I could not get past the wish to broadcast my identity without having to interact with anyone.

Facebook, of course, caters to that desire.

The New Inquiry: Comfortably Alone

Wall of Sound: The iPod has changed the way we listen to music. And the way we respond to it. – By Nikil Saval – Slate Magazine

As certain foodies score points by having eaten everything—blowfish, yak milk tea, haggis, hot dogs—so the person who knows and likes all music achieves a curious sophistication-through-indiscriminateness.

Somewhat guilty as charged. See also Tyler Cowen on the internet and eclecticism.

Wall of Sound: The iPod has changed the way we listen to music. And the way we respond to it. – By Nikil Saval – Slate Magazine

Wine descriptors tell us more about a bottle’s price than its flavor. – By Coco Krumme – Slate Magazine

“Graphite. Black currant. Incense. And camphor?” This is a great read. You’ve probably read something similar about wine bullshit before, but this is probably better. Interesting that more expensive wines are described with more specific words.

When it comes to invoking elegance, foreign and complex words have a natural advantage. Cigars and truffle conjure up prestige and luxury. Meanwhile, a little-known berry or spice conveys the worldly sophistication of the critic, which the drinker can share. For a price.

Wine descriptors tell us more about a bottle’s price than its flavor. – By Coco Krumme – Slate Magazine

Marginal Revolution: Sex and Statistics or Heteroscedasticity is Hot

Alex Tabarrok mulls over the recent OkTrends post on the Mathematics of Beauty.

I think there are certain types of beauty that greatly attract some men but repel others. Analagously, some people will pay hundreds of dollars for an ounce of caviar that other people won’t eat for free. The reason some people love caviar, however, is not that other people dislike it. Instead, it just so happens, that the thing that some people love is the very thing that repels others. We see the same phenomena in art, some people love John Cage, other people would rather listen to nothing at all. ;)

Now if we mix in this kind of beauty–beauty over which there are violent disagreements–with the kind that most people do agree upon (think Haagan-Dazs vanilla ice cream) then I suspect that it will appear that lower rankings increase messages. But what is really going on is that high rankings–conditional on their also being many low rankings–actually signal an extra strong attraction. Someone who tells you that John Cage is their favorite composer is telling you more than someone who says Aaron Copland is their favorite composer.

Marginal Revolution: Sex and Statistics or Heteroscedasticity is Hot

Marginal Revolution: Sex and Statistics or Heteroscedasticity is Hot

Alex Tabarrok mulls over the recent OkTrends post on the Mathematics of Beauty.

I think there are certain types of beauty that greatly attract some men but repel others. Analagously, some people will pay hundreds of dollars for an ounce of caviar that other people won’t eat for free. The reason some people love caviar, however, is not that other people dislike it. Instead, it just so happens, that the thing that some people love is the very thing that repels others. We see the same phenomena in art, some people love John Cage, other people would rather listen to nothing at all. ;)

Now if we mix in this kind of beauty–beauty over which there are violent disagreements–with the kind that most people do agree upon (think Haagan-Dazs vanilla ice cream) then I suspect that it will appear that lower rankings increase messages. But what is really going on is that high rankings–conditional on their also being many low rankings–actually signal an extra strong attraction. Someone who tells you that John Cage is their favorite composer is telling you more than someone who says Aaron Copland is their favorite composer.

Marginal Revolution: Sex and Statistics or Heteroscedasticity is Hot

Excerpt from Jay-Z’s New Book ‘Decoded’: Cristal’s Diss of Hip-Hop – TIME

The same goes for other brands: Timberland and Courvoisier, Versace and Maybach. We gave those brands a narrative, which is one of the reasons anyone buys anything: not just to own a product, but to become part of a story. […] It wasn’t just a premium champagne anymore — it was a prop in an exciting story, a portal into a whole world. Just by drinking it, we infused their product with our story, an ingredient that they could never bottle on their own.

Excerpt from Jay-Z’s New Book ‘Decoded’: Cristal’s Diss of Hip-Hop – TIME