A person's incentive to spend additional money on conspicuous consumption goods will be _______________ to the amount and reliability of independent information that people have about his abilities.
A)unrelated
B)positively related
C)inversely related
D)equal

Question

Quizplus · Accepted Answer

If people have reliable independent information about a person's abilities, then that person's incentive to spend additional money on conspicuous consumption goods will be lower. The reason is that the person's abilities are already established and known, and therefore there is less need to signal or prove their status through expensive consumption. In other words, the more reliable the information about a person's abilities, the less they need to spend on conspicuous consumption to signal their status.

A Person's Incentive to Spend Additional Money on Conspicuous Consumption