It is often observed that some professionals prefer to drive expensive cars, while some others (who earn similar amounts) do not. What typically accounts for this difference?
A) This game has two Nash equilibria; one where everyone drives expensive cars and another where they do not.
B) This is because there is a dominant strategy Nash equilibrium here where everyone should drive expensive cars but some people do not understand that this is the equilibrium.
C) Those who are concerned about the environment often drive hybrid or electric cars that tend to be more expensive than petrol or diesel cars.
D) This is because for some people the car they drive serves as a signal of professional success; while some others signal success via different means.

Question

Quizplus · Accepted Answer

The choice of driving an expensive car often serves as a signal of professional success for some individuals, while others may choose different methods to signal their success or have different priorities, such as environmental concerns or personal values that do not emphasize material possessions.

It Is Often Observed That Some Professionals Prefer to Drive