The Veblen Effect refers to the phenomenon where people are inclined to pay more for a product as its price increases, often associated with luxury goods. Named after American economist Thorstein Veblen, this effect contradicts the usual law of demand. People exhibit this behavior to signal wealth and success, associate with quality and exclusivity, and for social comparison. However, it can lead to conspicuous consumption, causing potential financial difficulties. The Veblen Effect provides insight into the psychology of luxury consumption. Understanding it helps in making informed purchasing decisions.









