Positional Goods
Categories: Company Management
“Positional goods” are goods that are valuable because they are somewhat uncommon, and because they're status symbols. When someone cruises up to the marina in a Bugatti, and then walks to their Princess 40M yacht in Christian Louboutin heels, we know they’ve got money. Or, at least, their positional goods indicate that they’re very financially comfortable.
This isn’t to say that Bugattis aren’t good cars, or that Louboutins aren’t fabulous shoes, or that Princess doesn’t make one heck of a yacht. They are, and they do. But a 2019 Bugatti Chiron costs almost $3 million new, and while we’re totes on board with 1,500 horsepower and a zero-to-sixty of 2.3 seconds, let’s be real: with that price tag, we’re paying in part for the social status that comes with owning a Bugatti. Bugattis are awesome, and they’re also positional goods. Now if Bugatti ever decided they’d had enough of being all exclusive and dropped the price of their vehicles to $30,000, everyone and their grandma would buy one, and they’d no longer hold the same prestige. Their positional goodness would be gone.
And so would we, in our new 1,500-horsepower supercar.
