Have you ever thought why people pay thousands of dollars for a single purse?

The purse you see above is “Les Extraordinaires Corcodile”. The price is 33.000 dollars. Do you know why?

“Reinterpreted with a flap and in precious crocodile with a vintage, whitewashed patina, the Crocodile Old Speedy Flap is also the first of the season’s two Les Extraordinaires, available in a strictly limited, numbered edition.” (http://www.ilvoelv.com/2012/01/louis-vuitton-springsummer-2012-bag-names-and-prices.html)

This quotation explains it all. “Precious, the first, strictly limited, numbered edition.” and as you can understand “extraordinaires”. There comes the concepts of satisfaction, social statue, arrogance and greed. Having this precious and rare purse makes people feel so special that they are willing to pay 33.000 dollars which they can only put their sunglasses and phone.

As it is explained in microeconomics, these kind of goods are called “veblen goods” and their demand increases as price increases. Rolex watches, prada wallets etc. are all veblen goods which are overpriced and demanded more because of their high prices. These huge companies managed to affect people, be the best in their industry, and advertise their goods so well that they deserve to earn those big amounts. Not for the product, but for the effort they put in, and to be able to sell a purse for 30.000 dollars. Well what can we say, it is business…

Lastly, a little interesting fact that most of us know, but try to deny.

This little crocodile costs 50 dollars more

Images taken from:

http://www.ilvoelv.com/2012/01/louis-vuitton-springsummer-2012-bag-names-and-prices.html

http://www.mediabistro.com/unbeige/crocodile-dentists-win-lacoste-logo-legal-battle_b4457

Bibliography:

“Monogram Transparence.” Louis Vuitton Spring/Summer 2012 Bag Names and Prices Web. 08 Oct. 2012. <http://www.ilvoelv.com/2012/01/louis-vuitton-springsummer-2012-bag-names-and-prices.html>.