The Demand for Unobservable and Other Nonpositional Goods
Author(s)
Frank, Robert H.
Abstract
The demonstration effect applies more forcefully to some goods than others. We know what kind of cars our acquaintances drive, but not what kind of insurance they buy. This selection analyzes the demand for “positional” and nonpositional goods, develops a formal model of the decision to consume such goods, and examines empirical evidence on savings behavior and on labor compensation and union contracts.
