I happened upon this little article today on Calculated Risk:
I’ve never cared much for jewelry. I bought my wife’s engagement and wedding rings at a family friend’s store, a lovely little white gold interlocking pair. She bought me a pretty simple band in return. We’re happy with them, but don’t really have much else. We don’t need bling. (I know, bad consumer lemmings.)
In the comments section of that CR article, someone pointed out this interesting article, notably from 1982:
It’s long, and I’ll admit, I didn’t read the whole thing. Still, the premise that diamonds are artificially scarce, a cartel runs things, and prices are stupid as a result makes for some good insight into what makes a market tick. Their theory was that the economic stresses of the 80s would shake people into reality, but as we now see, it didn’t stick. So what about this time? Where will the economy go, and what effect will it have on diamonds?
Diamonds are the subject of some mighty fine marketing, so it will be interesting to see how long people can be duped.
Of course, in the game world there aren’t any direct parallels, but I do point to the $15/month subscription rate as a mild example. In a new market, that benchmark was set, and few have bothered to question it. It just became the “common wisdom”, and marketing wonks and customers took it for granted, regardless of what it actually meant. Many have rationalized it or tried to justify it, but challenging it is something that relatively few people bother to do. (If you happen to follow that link over to Kill Ten Rats, do a quick search for $15 in their database. They have some great articles all over, but the ones that the $15 search brings up are especially relevant here, especially the one Zubon posted yesterday.)
I’m hopeful that the current economic stress will wake people up before they do something really disastrous with their money, but at the same time, if history is any indication, this period of strife will be marked with government programs touted as solutions, but proving to be more burdens for future generations and a short attention span for the average consumer. The market will chug along, finding new suckers, even if it doesn’t sell the same products. (Buy Green?)
Hang on to your wallet, and pay attention to where your money goes, and why.